Market news

7 May 2021

GBP/USD to surge above 1.40 on a soft NFP reading – TDS

FXStreet reports that economists at TD Securities note that cable continues to exhibit all the hallmarks of a range-trade and highlight the key levels to watch.

“The MPC simply delivered few surprises to the overall market. As such, the decision to taper asset purchases looks fully priced. As a final component, part of the underwhelming response could be the result of the way in which the move was communicated. We think the FX market will still see this as a policy shift – at least at the margin.”

“A GBP/USD break higher looks path-dependent upon both a softer NFP reading and a pledge by the Scottish pro-independence factions not to pursue an immediate referendum if they achieve the expected majority in the local parliament. That set of outcomes would likely be followed by another test of the recent range highs in the 1.4000/10 zone. A clear break above would naturally target a move toward the late February peak at 1.4237.” 

“We think dip buyers are likely to emerge first around 1.3800, while the double-bottom at 1.3670 should provide fairly robust support at this stage.”

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