GBP/USD: 5-week old resistance-line in focus ahead of UK employment data

  • The lack of Brexit headlines confines the Pound moves under more than a month-long descending trend-line.
  • A likely positive employment series could propel the quote beyond 1.3115 upside barrier towards 1.3200.

The GBP/USD pair is on the rounds near 1.3090 while heading into the London open on Tuesday. The quote recently witnessed pullback as failure to surpass five-week-old trend-line resistance joined overall pullback of the US Dollar (USD). Monthly employment data from the UK and industrial production from the US will be in focus for now.

With the Brexit headlines taking a back seat due to Easter recess at the British parliaments, investors recently gave more importance to the risk sentiments and data-points.

Monday’s overall risk-on dragged the greenback down against the majority of its counterparts and the British Pound (GBP) was no exception.

During early Tuesday, the US Dollar witnessed pullback after luggish performance of the global equity benchmarks pushed investors back to the greenback. Adding to the sentiment could be the latest news from the UK that lawmakers are working to avoid no-deal Brexit and likely turning down the scope of participating in the EU elections even at the cost of breaking cross-party talks for early proposal on departure.

Moving on, traders may now concentrate on February month average earnings and unemployment rate from the UK, coupled with the British claimant count change for March, ahead of focusing on the US industrial production figure.

Forecasts suggest that the British unemployment rate and average earnings excluding bonus may remain unchanged at 3.9% and 3.4% respectively. However, average earnings including bonus component may rise to 3.5% from 3.4% whereas claimant count change could soften to 20K from 27K. Furthermore, the US industrial production could rise to 0.2% from +0.0%.

GBP/USD Technical Analysis

While 1.3060 and 1.3010 act as immediate support, a break of which can shift market focus back to 200-day simple moving average (SMA) figure of 1.2975.

Meanwhile, a downward sloping trend-line since mid-March, at 1.3115, may limit the quote’s nearby advances ahead of fueling it to 1.3200 and 1.3265/70 numbers to the north.

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