GBP/USD breaking new ground as it looks for 1.44 ahead of UK jobs
|- Sterling is climbing to multi-year highs as confidence in an impending rate hike mounts.
- Average Earnings in the UK session could spark a Sterling bull run if the numbers manage to beat expectations.
The GBP/USD is back into Monday's highs near 1.4340 after reaching up in the early Asia session to break into almost three-year highs at 1.4354, the Sterling's highest valuation since the Brexit referendum.
The Sterling has had a solid run-up against the Greenback recently and is currently breaking into new highs that haven't been seen since the Brexit referendum in June of 2016 sent the GBP/USD from the 1.5000 major psychological level, tumbling over 20 percent. Coinciding with the USD's steady decline, the Sterling has lifted consistently from the bottom at 1.1985 in January of 2017 and looks set to challenge price levels not seen since 2015 and beyond, assuming the Queen's currency can avoid a stiff rejection from this level and form a double top on major charts.
GBP/USD Forecast: The big levels to watch above and beyond
The focus for the London Tuesday session will be the GBP's AVerage Earnings being reported at 08:30 GMT. Average Earnings excluding bonuses are expected at 2.8 percent versus the previous 2.6, while earnings including bonuses are forecast at 3.0 percent compared to the previous reading of 2.8. Wage growth is expected to expand, a May rate hike from the Bank of England (BoE) is practically a shoe-in, and as FXStreet's Mario Blaschak noted, "the very signs of accelerating wages are set to be published on Tuesday by the UK’s Office for National Statistics, and the figures are expected to be pretty shocking with the average weekly earnings excluding bonuses up 2.8% over the three months to February while nominal wage growth including bonuses is seen rising 3.0% over the three months to February. With nominal wages up 3.0%, the real, inflation-adjusted wages, should start to rise again in the sign of fundamental support for the UK consumer spending. The UK wage growth is also set to confirm the prophecy of the Bank of England Monetary Policy Committee member Ian McCafferty, who said last week that the Bank should not delay hiking interest rates again due to a possibility of faster pay rises."
GBP/USD Levels to consider
Despite the Pound's firming position in the charts and strengthening macro figures, FXStreet's Chief Analyst Valeria Bednarik has noticed some contrarian warning signs in the GBP/USD, noting that, "average hourly earnings are expected to have advanced from previous readings, with wages, excluding bonuses, seen up 2.8% in the three months to February. Inflation, on the other hand, is seen decreasing, and both combined should mean decreasing pressure on the BOE to raise rates, which may have a contrarian effect on Pound, sending it lower when macroeconomic data improves. In the 4 hours chart, technical indicators have lost upward strength in overbought levels, with the RSI pretty much consolidating and the Momentum retreating. Nevertheless, and with the pair holding near its daily high, the risk is lean to the upside, with the next big resistance being 1.4345, January's monthly high."
Support levels: 1.4180 1.4150 1.4115
Resistance levels: 1.4295 1.4345 1.4390
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