GBP/USD Forecast: Brexit and BOE weighing on Sterling

Valeria Bednarik FXStreet

GBP/USD Current Price: 1.3000

The UK will release employment data this Tuesday, unemployment rate seen stable at 3.8%.
Dollar trading firmer, although a US holiday interrupted its rally.
GBP/USD bearish and at risk of losing the 1.2900 level.

The GBP/USD pair traded as low as 1.2961 this Monday, as while the dollar retained the positive tone triggered by encouraging US data, while the Pound is having a hard time to attract investors amid persistent Brexit uncertainty and chances of an upcoming rate cut from the BOE. The UK released the January Rightmove House Price Index which rose by 2.3% MoM and by 2.7% YoY, although the figures hardly provide support to the local currency.

The UK will release December employment data this Tuesday, with the ILO unemployment rate seen stable at 3.8% in the three months to November. The Claimant Count Change is foreseen at 24.5K from the previous 28.8K in December. Average Hourly Earnings in the mentioned quarter are seen increasing by 3.1% including bonus, and by 3.4% excluding bonus.

GBP/USD short-term technical outlook

The GBP/USD pair is trading around the 1.3000 level, and technically bearish, as it keeps developing below the 23.6% retracement of its latest daily slide. Furthermore, the 4-hour chart shows that it spent the day below all of its moving averages, which lack directional strength, while technical indicators remain within negative levels, although without clear directional strength. The risk of additional slides will increase on renewed that sends the pair below 1.2965.

Support levels: 1.2965 1.2930 1.2890

Resistance levels: 1.3010 1.3050 1.3090

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.

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