GBP/USD analysis: flirting with 1.2700 ahead of key UK data

Valeria Bednarik FXStreet

GBP/USD Current price: 1.2708

UK employment data mixed, decreasing wages' growth weighed more.
Renewed fears about a no-deal Brexit added to Pound's weakness.

The GBP/USD pair peaked at 1.2826 following the release of UK employment data, as the unemployment rate fell to 4.0% in June, the lowest level in 43 years. Nevertheless, the rest of the report was not that encouraging, as the number of people unemployed increased by 6.2K, surpassing the market's expectations of 3.8K. Furthermore, wages' growth missed the markets' forecasts, as average earnings including bonus increased by 2.4% in the three months to June, below the previous 2.5%, while excluding bonus wages were up by 2.7% as expected. Broad dollar's strength prevented the pair from holding on to gains, with the decline then exacerbated by headlines related to a no-deal Brexit, as British foreign minister Jeremy Hunt said that "everyone needs to prepare for the possibility of a chaotic no-deal Brexit,” adding that the risk of such happening has been increasing recently. UK July inflation will be out this Wednesday, with monthly CPI seen flat, and up by 2.5% when compared to a year earlier. The pair plunged to flirt with the 1.2700 figure late US afternoon and settled not far above it, looking poised to extend its decline in the upcoming sessions, as in the 4 hours chart, technical indicators resumed their declines, the Momentum after failing to re-enter positive territory, and the RSI now heading south around 30. The same chart shows a failed attempt to recover above a bearish 20 SMA, which maintains its sharp bearish slope.

Support levels: 1.2680 1.2645 1.2610

Resistance levels: 1.2755 1.2795 1.2830

View Live Chart for the GBP/USD

Author

Valeria Bednarik

FXStreet

Valeria Bednarik was born and lives in Buenos Aires, Argentina. Her passion for math and numbers pushed her into studying economics in her younger years.

GBP/USD weakens below 1.3250 on UK political risks, BoE repricing

The GBP/USD pair trades in negative territory around 1.3245 during the early Asian trading hours on Wednesday. Traders await the UK political developments, focusing on potential leadership by Andy Burnham and adherence to existing fiscal rules. Bank of England Governor Andrew Bailey is set to speak later in the day. On Thursday, all eyes will be on the US jobs data for June.

EUR/USD declines to near 1.1400 as softer German inflation undercuts ECB hike bets

The EUR/USD pair loses momentum to near 1.1410 during the early Asian trading hours on Wednesday, pressured by receding bets for aggressive tightening by the European Central Bank (ECB). Traders will take more cues from the preliminary reading of the Harmonized Index of Consumer Prices from the Eurozone and US Manufacturing Purchasing Managers Index report, which are due later in the day.

Gold's path of least resistance remains to downside ahead of Warsh

Gold comes under renewed selling pressure early Wednesday and gives up $4,000 yet again. The US Dollar stands tall on surging USD/JPY, Mideast woes and hawkish Fed bets. Gold remains poised to crack November 2025 lows near $3,930 amid bearish technicals.

Bitcoin drops near $58K as ETF outflows surge, downside risks persist

Bitcoin could see a short-term relief from heavy selling pressure as quarter-end portfolio rebalancing could potentially revive spot BTC exchange-traded funds inflows, according to a K33 report on Tuesday.

Why a hawkish Bank of Japan could trigger the next Bitcoin sell-off

The Japanese Yen hits a 40-year low of 162.00 against the US Dollar, raising concerns about intervention or additional rate hikes by the Bank of Japan. BoJ may sell US Treasuries to buy back Yen, potentially pushing US bond yields higher and making Bitcoin less attractive to investors.

Kevin Warsh isn't expected to say much in Sintra: That's exactly why markets will listen

Financial markets could find an important catalyst in the enchanting, fairytale-like landscape of Sintra this week. The ECB Forum will, as it does every year, gather the crème de la crème of central banks. The new boss at the Fed, who has clearly said that the Fed should stop explaining everything, will need to talk – and traders should listen.