The Pound retraces back upwards as risk appetite improves and the US Dollar loses steam. Two positive factors are driving the Pound higher in early trading today. The first being the announcement from China that they will be holding talks with the US, spreading positivity throughout markets and increasing demand for high beta currencies such as the Pound. The second positive driver for the Pound is the weakening greenback after yesterday’s economic data which showed weak data from the US’s manufacturing sector. For today, the main driver of the pair will be the results of the US NFP report which will move the pair from the US Dollar’s side. Additionally. investors need to keep in mind that any news related to Brexit should also be considered for today’s trading decisions.
The pair is currently ranging between the 13 and 50 moving averages with investors waiting for the NFP results to guide them through their next move. A positive NFP report from the US will strengthen the greenback and push the pair lower back towards 1.2504. However, a negative NFP report will weaken the greenback and push the pair higher towards 1.2711.
Support: 1.2607/ 1.2504
Resistance: 1.2671 / 1.2711