GBP/USD saw a rise towards 1.2780 on Wednesday as hopes for a rate cut reignited. The US data fell short of expectations, indicating further weakening. The upcoming UK election on Thursday is expected to bring a new wave of volatility to the market.
The US ADP Employment Change dropped to 150K in June, below the forecast of 160K. Initial Jobless Claims also increased to 238K for the week ending June 28. The ISM Services Purchasing Managers Index (PMI) in June contracted sharply to 48.8, the lowest level since June 2020.
With US markets closed for Independence Day on Thursday, focus will shift to the UK Parliamentary Elections. The Labour Party is anticipated to win a majority, ending the Conservative party’s 14-year rule. According to recent polls, Labour is projected to win 431 seats compared to the Tories’ 102.
GBP/USD technical outlook shows a bullish rebound towards 1.2780, with a heavy supply zone above 1.2800. The pair is trading above the 200-day EMA at 1.2604.
Overall, the GBP/USD pair is experiencing increased volatility ahead of the UK election and amidst softening US economic data.