GBP/USD turns negative, dips to 1.3330 after ADP report

The GBP/USD erased its tepid gain to hit a fresh 3-week high level of 1.3372 and turned back into negative territory immediately after the release of ADP report.

Details from the ADP report, released just a while ago, showed US private sector added 179k new jobs during the month of July, which was better-than 170k expected. Previous month reading was also revised higher to 176k as compared to 172k reported earlier.

Being an early indicator to the official government report, NFP, better-than-expected provided a mild respite for the US Dollar bulls, with the GBP/USD pair dipping to 1.3325 before retracing few pips to currently trade near 1.3335 region.

Up next is the US ISM Non-Manufacturing PMI for July, which if comes-in stronger-than-expected might provide an additional boost to the greenback. 

However, the pair's near-term direction would be determined after Thursday’s BOE monetary policy decision, where the central bank is expected to lower its interest rates by 25 bps. 

Technical outlook

Valeria Bednarik, Chief Analyst at FXStreet, notes, "Technically, the 4 hours chart shows that the modest bullish tone gained yesterday persists, with the 20 SMA heading higher below the current level and the price hovering around a major Fibonacci resistance the 23.6% retracement of the latest downward move. In the same chart the RSI heads north around 63, while the Momentum remains directionless within positive territory."

"Above 1.3365, this week high, the pair can extend up to the 13400 region, but seems unlikely it can advance further. Below the mentioned daily low on the other hand, the decline can extend down to 1.3245."