GBPUSD 04-05-2018 Intra-day analysis.

Daily Forex Market Preview, 04/05/2018

The U.S. dollar was seen holding ground on Thursday albeit trading mixed. Economic data on the day included the UK’s services PMI. Data showed that services sector activity increased modestly from March’s 51.7 to 52.8.

In the Eurozone, the flash inflation estimates showed that headline inflation rebounded to 1.2% but this was below forecasts of a 1.3% increase. Core inflation rate eased further to 0.7%.

The ISM’s non-manufacturing PMI data showed that the index eased to 56.8 missing forecasts and down from March’s reading of 58.8

Looking ahead, the economic data for the day will see the nonfarm payrolls report standing out. Median forecast point to the U.S. unemployment rate potentially easing to 4.0% in the month of April. The number of jobs added during the month is expected to rebound from March’s 103k to 189k. Wage growth which also remains a key component is expected to show a 0.2% increase on a month over month basis. A better than expected report could potentially renew hawkish bets on the U.S. dollar.

Elsewhere, the Canadian Ivey PMI data is due to be released today. A number of Fed speeches are also lined up including Dudley, Williams and Quarles.

GBPUSD 04-05-2018 Intra-day analysis

GBPUSD (1.3576): The British pound continued its decline although price action remains supported above the price level of 1.3530. The weaker services PMI data cast doubts on whether the BoE would be able to hike rates next week. This led to the GBPUSD posting declines. From a technical outlook, we expect to see the currency pair consolidating near the current levels of support. A rebound off this price level could signal a potential move to the upside. The breached trend line remains a key dynamic resistance level if there is a correction.