GBP/USD turns sharply lower after US jobs data

The GBP/USD pair erased all of its recovery gains to 1.3175 level and plunged to 1.3070 region following the release of surprisingly stronger-than-expected headline NFP print. The pair has now managed to retrace few pips to currently trade around 1.3100 region.

The pair dropped to weekly low of 1.3070 after the US Commerce Department reported that US economy added 255k new jobs during the month of July, way above 180k consensus forecast. Meanwhile, the hourly wage growth also posted a strong growth of 0.3% as compared to 0.2% expected and June's 0.1% growth. The unemployment rate held steady at 4.9%.

The headline numbers surpassed the most optimistic estimates and triggered a sharp bullish spike for the greenback on reviving hopes of an eventual Fed rate-hike in 2016.

Technical levels to watch

On a sustained weakness below 1.3070-60 strong horizontal support, the pair seems all set to break through 1.3000 psychological mark, and head towards testing its next major support near 1.2975-70 zone.

On the flip side, any recovery attempts might now confront strong resistance near 1.3150 region and only a sustained move above this immediate resistance would increase the prospects of further recovery towards 1.3200 round figure mark.