GBP/USD Forecast: Pressure mounts on Pound ahead of budget´s deadline

Valeria Bednarik FXStreet

GBP/USD Current Price: 1.3004

The UK is not seeking anything special from the EU in trade talks, according to the PM’s spokesman.
UK employment figures to be out this Tuesday, wages seen holding above 3.0%
GBP/USD nearing the 1.3000 level, turning bearish in the short-term.

The GBP/USD pair is finishing Tuesday with modest losses near the 1.3000 figure. The Pound declined during London trading hours, with no clear catalyst behind it, but concerns about whether the new Chancellor of Exchequer will be able to deliver the budget on time. A statement from UK PM Johnson’s spokesman showed that the UK is not seeking anything special from the EU in trade talks and that they are ready to negotiate.

The UK has a busy macroeconomic week, starting this Tuesday with the release of the latest employment figures. The ILO unemployment rate is seen steady at 3.8% in the three months to December, while average hourly earnings in the same period are seen up by 3.0% including bonus, and by 3.3% excluding bonus. Overall, the numbers are expected to be encouraging, but that won’t be a surprise for traders.

GBP/USD short-term technical outlook

The GBP/USD pair is gaining bearish traction according to the 4-hour chart, as it is developing below all of its moving averages after being unable to advance beyond the 200 SMA. Technical indicators ease within positive levels, nearing their midlines. The 1.3000 figure is the immediate support ahead of a more relevant one at 1.2970. Below this last, the bearish case will be stronger, with the market then eyeing the 1.2900 figure.

Support levels: 1.3000 1.2970 1.2930

Resistance levels: 1.3040 1.3085 1.3120

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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