GBP/USD: Robust NFP figures to send cable below critical support at 1.3875

GBP/USD has weathered dollar strength after the Bank of England (BoE) took a hawkish step. A bigger test is due now. Will Nonfarm Payrolls outweigh the pound's resilience or not? The answer will be known soon enough, Yohay Elam, an analyst at FXStreet, briefs.

See – NFP Preview: Forecasts from seven major banks for July jobs report, estimates vary more than usual

US Nonfarm Payrolls are left, right and center for markets

“The labor market is now in focus as the US releases its Nonfarm Payrolls report for July. Economists expect an increase of 870,000 positions, but estimates vary widely, partly a result of mixed leading indicators. Apart from the headline number, investors will also be watching Average Earnings. Any increase in wages implies higher inflation down the road and a growing chance of tapering.” 

“Pound/dollar bounced off 1.3875, which is now a critical support line. If the NFP sends cable lower, the next cushion awaits at 1.3850, and then only at 1.3760.” 

“Resistance is at 1.3950, the high point on Thursday, and then at 1.3980, July's high. Above 1.40, the first significant cap is 1.4030.”