GBP/USD clings to gains near 1.2900 handle, moves little after UK jobs data

   •  A subdued USD price action helps stage a modest rebound after the overnight slump.
   •  Mixed UK labour market report does little to provide any meaningful impetus.
   •  Brexit uncertainties might continue to keep a lid on any strong recovery move.

The GBP/USD pair held on to its goodish recovery gains near the 1.2900 handle and had a rather muted reaction to the mixed UK labour market report.

The pair stalled last week's sharp retracement slide from the 1.3175 region and caught some bids on Tuesday, snapping three consecutive days of losing streak. With investors still digesting the latest negative Brexit headlines, a subdued US Dollar price action was seen as one of the key factors behind the pair's initial rebound. 

The pair, however, failed to capitalize on the positive momentum and moved little after the latest UK employment details showed that average earnings data (excluding bonus) recorded a growth of 3.2% during the past three months to September. 

The reading was better than 3.1% growth expected and an upwardly revised 2.8% previous, albeit was largely negated by an unexpected rise in the UK unemployment rate, coming in at 4.1% 3m/y in September as compared to 4.0% previous and expected. 

Adding to the disappointment, the number of people claiming unemployment-related benefits jumped by 20.2K in October as against 4.3K rise anticipated and an upwardly revised reading of 23.2K in the previous month.

It would now be interesting to see if the pair is able to build on the positive momentum or runs into some fresh supply at higher levels amid persistent Brexit uncertainties, given that the likelihood of an EU Brexit summit might have been pushed to December 13-14.

Technical levels to watch

Any subsequent up-move is likely to confront fresh supply near the 1.2945-50 region, above which a bout of short-covering could lift the pair further towards reclaiming the key 1.30 psychological mark. On the flip side, the 1.2845 level now seems to protect the immediate downside, which if broken is likely to accelerate the fall further towards challenging the 1.2800 round figure mark.