GBP/USD: Downside opening up towards 1.2800 ahead of UK jobs?

The GBP/USD pair extended its bearish consolidation phase near two-week lows in the Asian trades, as investors remain on the back foot ahead of the UK employment data and Fed Chair Yellen’s testimony due later today.

GBP/USD looks to test Tuesday’s low at 1.2832

The major failed to sustain a minor-recovery near 1.2860 region once again and revisited daily lows of 1.2842 last minutes, as the sentiment around the pound continues to remain weighed down by disappointing comments from the BOE policymakers - Haldane and Broadbent, both of which failed to throw fresh light on the BOE’s rate hike prospects this year.

 Additionally, comments from the former UK Business Secretary Vince Cable delivered at a lunch in Parliament in London yesterday, also keeps any recovery limited. Cable warned that the UK voters aren’t ready for interest rate hikes.

Furthermore, in today’s UK employment data release, markets expect the hourly wages to tick lower alongside an increase in the claimant count change, which could exacerbate the pain in Cable.

However, it remains to be seen whether risk reset combined with ongoing broad USD weakness would help cushion the downside in GBP/USD ahead of the testimony due from the Fed Chair Yellen on the Semiannual Monetary Policy Report before the House Financial Services Committee.

GBP/USD levels to consider             

Valeria Bednarik, Chief Analyst at FXStreet noted, “Technically, the pair has broken below the 38.2% retracement of its latest bullish run, now finding resistance around it at 1.2860, while in the 4 hours chart, the 20 SMA maintains a strong bearish slope above the current level, whilst the Momentum indicator continues to lack direction around its 100 level, but the RSI hovers near oversold levels, this last supporting additional declines ahead.  The 50% retracement of the same rally stands at 1.2810, now the immediate support. Support levels: 1.2810 1.2770 1.2730 Resistance levels: 1.2860 1.2895 1.2925.”