GBP/USD continues to move sideways below 1.26

• UK's Barclay says no-deal Brexit could cause a recession.
• US Dollar Index stays in consolidation phase below 97.
• Friday's NFP report is likely to be the next significant catalyst.

Similar to other major pairs, the GBP/USD pair is moving sideways on Thursday as the trading volume stays thin amid the Independence Day holiday in the U.S. As of writing, the pair was up 0.1% on a daily basis at 1.2584.

Earlier today, British Brexit Secretary Barclay argued that a no-deal Brexit could cause a recession and supply shortages in the UK. "The question is are we doing everything we can to prepare and are we trying to get a deal in the first instance, but if not how do we prepare in a sensible and professional manner? And that is what we're working extremely hard for the government to do," Barclay said, per Sky News.

Nevertheless, investors largely ignored Barclay's comments and are likely to remain on the sidelines until they see who becomes the next prime minister of the UK.

On the other hand, following Monday's rebound, the US Dollar Index struggles to gather momentum as markets continue to price a rate cut in July. Despite some hawkish comments from Fed officials earlier this week, the DXY stays below the 97 mark. The next significant catalyst for the greenback will be tomorrow's nonfarm employment report.

Markets expect the NFP to rebound to 160K in June from 75K in May. A higher-than-expected reading could weigh on the odds of a rate cut in July and help the dollar gain traction and cause the pair end the week on a negative note.

Technical levels to watch for