GBP/USD consolidates around 1.2900

GBP/USD is about to finish the day unchanged, after being unable to hold above 1.3000. Cable is consolidating around 1.2900 and it could continue to move around that level ahead of Friday’s NFP.

On Thursday, manufacturing activity and home prices data showed that the UK economy was in good shape before Brexit, now the outlook has changed dramatically and data from two months ago seems old. On the political front, the battle for the Conservative Party leadership will be between Theresa May and Andrea Leadsom, after the elimination of Michael Gove. In the US, initial jobless claims and the ADP private employment report gave support to the US dollar.

GBP/USD technical outlook

The pair ended the day flat but far from the highs. It was rejected from above 1.3000 but it did not reach new 31-year lows as it held during all day above 1.2870. A period of consolidation between 1.2900 and 1.3000 is likely for the coming hours while a break of the short-term support at 1.2870 could set a bearish tone.

If the Pound continues to hold significantly above the 31-year low set at 1.2790 (July 6) it could start forming a temporal base, favoring a bullish correction that could face two strong resistance areas at 1.3200 and 1.3500.