GBP/USD quickly reverses post-ADP dip to 1.40 neighborhood

   •  ADP report-led USD uptick turns out to be short-lived.
   •  Traders now look forward to US ISM PMI for fresh impetus.

The GBP/USD pair extended its rejection slide from just ahead of the 1.4100 handle and tumbled to the 1.40 neighborhood following the release of ADP report.

The pair met with some fresh supply after the latest ADP report showed US private sector employers added 241K jobs during the month of March, well above 205K anticipated. Adding to the positive headline number, previous month's reading was revised higher to show an addition of 246K, as against 235K reported earlier and provided a minor boost to the US Dollar. 

The greenback, however, lacked any strong follow-through traction and was being capped by escalating US-China trade-war fears. The pair once again managed to find some decent support ahead of the key 1.40 psychological mark and quickly rebounded back to 1.4040 area as traders now look forward to the release of US ISM non-manufacturing PMI for some fresh impetus.

Technical outlook

Valeria Bednarik, American Chief Analyst at FXStreet writes, “the 4 hours chart for the pair shows that it stabilized right below a directionless 20 SMA and the 38.2% retracement of the March rally, while the Momentum indicator heads nowhere around its mid-line and the RSI hovers around 42, overall failing to suggest an upcoming direction. Still and given that the pair is near the lower end of its latest range, the risk is skewed toward the downside, with a break below 1.4010 exposing the more relevant 1.3985 support.”