Ahead of the non-farm payroll data, market sentiment turned cautious, and the pound remained range-bound against the dollar.
2026-01-09 11:04:53
During Friday's Asian trading session, the pound remained range-bound against the dollar, trading around 1.3435, slightly above the weekly low retested in the previous session.
With the US non-farm payrolls report due soon, market sentiment is cautious, and traders are generally choosing to wait and see, avoiding establishing new directional positions before the key data is released. The upcoming US employment data is considered a core variable influencing short-term market expectations.
The non-farm payroll report will not only provide important clues about the momentum of the US economy, but will also further influence the market's judgment on the future path of interest rate cuts by the Federal Reserve, thereby dominating the short-term performance of the US dollar and having a direct impact on the exchange rate of the British pound against the US dollar.
The upward momentum of the US dollar is somewhat restrained ahead of data-related risks. On the one hand, market bets on the Federal Reserve continuing to ease monetary policy remain;
On the other hand, the relatively stable performance of global stock markets diminished the appeal of the US dollar as a safe-haven asset. These factors combined limited further gains for the dollar after it reached a one-month high, and provided some support for the pound against the dollar.
Regarding the pound, the Bank of England's recent signals have been relatively dovish and neutral. Central bank officials have hinted that interest rates are gradually approaching the neutral range, and the overall rhetoric has not shifted significantly towards a dovish stance. This has provided some support for the pound and helped limit its downside potential against the dollar.
Therefore, in the absence of clear negative catalysts, the market still needs to see stronger selling momentum to confirm a deeper pullback in the exchange rate from the high of 1.3565–1.3570 reached at the beginning of this week (a new high since September last year).
Looking at the weekly performance, the pound is currently roughly flat against the dollar, with limited overall volatility. Although there is a lack of clear direction in the short term, the overall fundamental environment still leans slightly bullish, which is conducive to some bargain hunting at lower levels.
From a technical perspective, the exchange rate is still in a consolidation phase after a pullback from its highs in the short term. The 1.3400 level constitutes an important technical support area; only a decisive break below and stabilization below this level on the daily chart would confirm a further weakening technical signal.
Prior to this, the current pullback is more of a correction than a trend reversal, which means that aggressive short selling should still be approached with caution.
Editor's Note:
Overall, the pound/dollar exchange rate is currently in a "pre-data vacuum," with the market lacking the impetus to actively drive prices. The non-farm payroll report will be a key trigger factor determining the short-term direction.
With the expectation of a Federal Reserve rate cut yet to be disproven and the Bank of England's stance relatively stable, the downside potential for the exchange rate is temporarily limited. Short-term movements are more likely to be characterized by rapid, targeted fluctuations driven by data, rather than a one-sided trend.
With the US non-farm payrolls report due soon, market sentiment is cautious, and traders are generally choosing to wait and see, avoiding establishing new directional positions before the key data is released. The upcoming US employment data is considered a core variable influencing short-term market expectations.
The non-farm payroll report will not only provide important clues about the momentum of the US economy, but will also further influence the market's judgment on the future path of interest rate cuts by the Federal Reserve, thereby dominating the short-term performance of the US dollar and having a direct impact on the exchange rate of the British pound against the US dollar.
The upward momentum of the US dollar is somewhat restrained ahead of data-related risks. On the one hand, market bets on the Federal Reserve continuing to ease monetary policy remain;
On the other hand, the relatively stable performance of global stock markets diminished the appeal of the US dollar as a safe-haven asset. These factors combined limited further gains for the dollar after it reached a one-month high, and provided some support for the pound against the dollar.
Regarding the pound, the Bank of England's recent signals have been relatively dovish and neutral. Central bank officials have hinted that interest rates are gradually approaching the neutral range, and the overall rhetoric has not shifted significantly towards a dovish stance. This has provided some support for the pound and helped limit its downside potential against the dollar.
Therefore, in the absence of clear negative catalysts, the market still needs to see stronger selling momentum to confirm a deeper pullback in the exchange rate from the high of 1.3565–1.3570 reached at the beginning of this week (a new high since September last year).
Looking at the weekly performance, the pound is currently roughly flat against the dollar, with limited overall volatility. Although there is a lack of clear direction in the short term, the overall fundamental environment still leans slightly bullish, which is conducive to some bargain hunting at lower levels.
From a technical perspective, the exchange rate is still in a consolidation phase after a pullback from its highs in the short term. The 1.3400 level constitutes an important technical support area; only a decisive break below and stabilization below this level on the daily chart would confirm a further weakening technical signal.
Prior to this, the current pullback is more of a correction than a trend reversal, which means that aggressive short selling should still be approached with caution.
Editor's Note:
Overall, the pound/dollar exchange rate is currently in a "pre-data vacuum," with the market lacking the impetus to actively drive prices. The non-farm payroll report will be a key trigger factor determining the short-term direction.
With the expectation of a Federal Reserve rate cut yet to be disproven and the Bank of England's stance relatively stable, the downside potential for the exchange rate is temporarily limited. Short-term movements are more likely to be characterized by rapid, targeted fluctuations driven by data, rather than a one-sided trend.
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