GBP/USD recovers back to 1.2500 after US jobs data

The greenback stalled its recovery move, with the GBP/USD pair recovering back to 1.2500 psychological mark following the release of US monthly jobs report. 

Currently hovering around 1.2500 region, the pair caught fresh bids despite of upbeat headline NFP print that showed the US economy added 227K new jobs during the month of January. The reading was far better-than previous month’s reading of 156K and surpassed consensus estimates of 175K new jobs.
 
Markets, however, seemed disappointed by an up-tick in the unemployment rate, which rose to 4.8%, and dismal average hourly earnings that recorded 0.1% m-o-m growth as compared to previous month’s 0.4% and 0.2% expected. 

Dismal earnings growth failed to reinforce optimism surrounding the US labor market, against the backdrop of stellar ADP report, and assist the US Dollar’s ongoing recovery move from Thursday’s 11-week lows. 

Moreover, the data might have also dumped last hopes of Fed rate-hike action in March, which is evident from a sharp slide in the US treasury bond yields, and further collaborated to the pair’s sharp recovery during early NA session. 

Technical outlook

Valeria Bednarik, Chief Analyst at FXStreet notes, "The 4 hours chart shows that the pair was contained by selling interest around 1.2530, a Fibonacci resistance, while the price has fallen further below a flat 20 SMA, and technical indicators resumed their declines within bearish territory, indicating that sentiment has turned quite negative towards the Pound."

"A better-than-expected outcome should see the pair falling down to 1.2430, the 38.2% retracement of the latest bullish run, and the 200 EMA. If the level gives up, 1.2360/80 is next.  A poor employment report could see the pair recovering up to 1.2530, but it will take a strong upward acceleration above the level to confirm further gains, with 1.2565 and 1.2600 as the next short term resistances."