GBP/USD shifts its business above 1.2300 as market mood soars, US ISM Services PMI eyed

• GBP/USD has refreshed its five-month high above 1.2340 and is expected to extend its rally amid risk-on profile.
• After an upbeat US NFP data, a better-than-projected US ISM Services PMI release would trigger negative market impulse.
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The GBP/USD pair has shifted its auction profile above the critical hurdle of 1.2300 in the Asian session. The Cable has witnessed significant buying interest from the market participants as the risk-on profile has strengthened further. The major has refreshed its five-month high above 1.2340 and is expected to extend its rally amid significant interest for risk-perceived assets.

The US Dollar Index (DXY) has refreshed its five-month low at 104.14 amid rising odds of a slowdown in current interest rate hike pace by the Federal Reserve (Fed). To reduce financial risks and to observe the outcome of efforts made yet to bringing price stability, the Fed will decelerate its rate expansion pace.

S&P500 futures are displaying a subdued performance as investors have turned precautionary ahead of US ISM Services PMI data. Meanwhile, the 10-year US Treasury yields have jumped to near 3.53%.

The upbeat US Nonfarm Payrolls (NFP) data reported on Friday failed to propel the US Dollar, however, a better-than-projected US ISM Services PMI release could fetch firmer cushion for the same. As per the consensus, the economic data is seen at 55.6 vs. the prior release of 54.4. Apart from that, the catalyst which will impact Cable is the ISM Services New Orders Index data, which is seen higher at 58.5 against the former release of 56.5.

After displaying decent demand for labor by the United States economy, firmer forward demand for services would trigger risk-off mood. Robust demand in the US economy would indicate higher expectations for short-term inflation, which could compel the fed to continue current rate hike pace.

On the UK Front,