GBP/USD Forecast: holding ground, downside limited

Valeria Bednarik FXStreet

The GBP/USD pair trades near its daily low of 1.2300 following the release of the UK's latest employment report. The numbers were quite positive, as jobless claims fell by 10.1K in December, against a 3.7K rise expected, while there was a strong advance in wages, as Average hourly earnings, excluding bonus, rose 2.7% in the three months to November. The unemployment rate held at 4.8%, against expectations of an uptick to 4.9%. Nevertheless, the positive figures failed to trigger Pound's demand, still retreating from the 1.2415 posted late Tuesday.

Ahead of the release of US inflation figures, the 4 hours chart shows that the positive tone persists despite the pair eased over 100 pips so far today, given that the price is holding around a horizontal 200 EMA whilst holding above a bullish 20 SMA. Technical indicators in the mentioned time frame hold near overbought readings, trying to resume their advances, but still unable to confirm further gains.

Further slides below 1.2290 show lead to a continued decline towards the 1.2250 region first, en route to 1.2210, whilst above 1.2360 the pair will likely retest the mentioned weekly high at 1.2415.

View live chart of 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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