GBP/USD struggling to gain traction despite of notable USD weakness

Following a 50-pips wild swing during the mid-European session, the GBP/USD pair now seems to have stabilized around mid-1.2900s and had a muted reaction to the US macro data.

The pair held in 10-15 pips narrow range and failed to attract any fresh buying interest after disappointing US employment details - ADP report and weekly jobless claims. Traders seemed uninspired by data-led US Dollar weakness and held back from initiating any fresh positions, which has eventually led to a range bound subdued price action during early NA session.

   •  US Dollar tumbles to 3-day lows near 95.70

Today's dismal US data now seems to have dampened expectations for any positive surprise from Friday's official jobs data and hence, a pull-back in the US Treasury bond yields could help the pair to make a fresh attempt to dart back towards daily swing highs near 1.2985 area. 

Today's US economic docket also features the release of ISM non-manufacturing PMI and could act as a trigger that could help the pair to reclaim the key 1.30 psychological mark. 

Technical outlook

 Valeria Bednarik, Chief Analyst at FXStreet writes: "From a technical point of view, the pair presents a neutral-to-bullish stance, as the latest decline was reverted at levels above the 38.2% retracement of the latest bullish run, with the pair now trading above the 23.6% retracement of the same rally at 1.2925, the immediate support. In the 4 hours chart, the price is standing above a bearish 20 SMA, while technical indicators hover around their mid-lines, with no clear directional strength. Rather than US data, upcoming moves will depend on BOE's headlines, and whether policy makers are still willing to raise rates in the near term. To the upside, the pair needs to settle above the 1.2960 region to be able to extend its gains short term."