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The Pound Sterling (GBP)\u00a0jumps to near 1.2850 against the US Dollar (USD) in North American\u00a0trading hours on Wednesday, the highest level seen since November 12. The GBP\/USD pair extends its winning streak for the third trading day due to continuous underperformance from the US Dollar. The US Dollar Index<\/a> (DXY), which tracks the Greenback\u2019s value against six major currencies, slumps to near 105.00.<\/p>\n The US Dollar weakens as it loses its risk premium stemming from US President Trump\u2019s tariff agenda. On Tuesday, 25% tariffs on Canada and Mexico, and an additional 10% on China came into effect for pouring drugs into the US economy.<\/p>\n Market experts believe Trump\u2019s tariffs could weaken households’ overall spending, assuming that higher levies will be borne by US importers, who would pass on to end consumers. Such a scenario would diminish the purchasing power of individuals, forcing them to cut spending significantly.<\/p>\n Meanwhile, soft\u00a0US ADP<\/a> Employment Change has weighed further on the US Dollar.\u00a0The ADP reported that private employers added 77K fresh workers, lower than estimates of 140K and the former release of 186K. Soft labor demand in the US private sector is expected to prompt Federal Reserve<\/a> (Fed) dovish bets, which have already escalated lately. Fed dovish bets have swelled after a slew of weak US economic data. According to the CME FedWatch tool, the likelihood for the Fed to reduce interest rates in June has increased to 86% from 70% recorded a week ago.<\/p>\n For more cues on the current status of employment, investors will focus on the US Nonfarm Payrolls<\/a> (NFP) data for February, which will be released on Friday.\u00a0<\/p>\n <\/a><\/p>\n The Pound Sterling breaks above the 50% Fibonacci<\/a> retracement level plotted from the late September high to mid-January low, around 1.2770. The long-term outlook<\/a> of the GBP\/USD pair has turned bullish as it sustains\u00a0above the 200-day Exponential Moving Average (EMA), which is around 1.2680.<\/p>\n The 14-day Relative Strength Index (RSI) climbs above 60.00. A fresh bullish momentum would come into action if the RSI sustains above that level.<\/p>\n Looking down, the 38.2% Fibo retracement at 1.2608 will act as a key support zone for the pair. On the upside, the psychological 1.3000 level will act as a key resistance zone.<\/p>\n The ADP Employment Change is a gauge of employment in the private sector released by the largest payroll processor in the US, Automatic Data Processing Inc. It measures the change in the number of people privately employed in the US. Generally speaking, a rise in the indicator has positive implications for consumer spending and is stimulative of economic growth. So a high reading is traditionally seen as bullish for the US Dollar (USD), while a low reading is seen as bearish.<\/p>\nDaily digest market movers: Pound Sterling trades higher ahead of BoE Bailey\u2019s testimony<\/h2>\n
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Technical Analysis: Pound Sterling stabilizes above 200-day EMA<\/h2>\n
Economic Indicator<\/h2>\n
ADP Employment Change<\/h3>\n