GBP/USD extends losses to sub-1.3000 area, UK unemployment rate in focus


  • GBP/USD registers minor losses amid Brexit pessimism.
  • UK’s Brexit negotiator shares the same view as PM Boris Johnson, increases the risks of hard departure.
  • UK employment statistics will be the key to clarify on the BOE’s bearish bias.

GBP/USD stays mildly negative around 1.2998 while heading into the London open on Tuesday. The pair recently dropped after the UK’s Brexit negotiator David Frost propelled the odds of fierce trade negotiations between the European Union (EU) and Britain during the next month, also because of the US dollar’s broad strength. Though, markets are now awaiting the key employment data from the UK for fresh impulse.

The UK PM Johnson’s Brexit aide and the key negotiator David Frost crossed wires, while speaking at the Université libre de Bruxelles, during the early Asian session. The Tory member shares the same view as PM Johnson while saying, “the freedom to diverge from EU rules was the ‘point of the whole project’ of Brexit. The diplomat also showed readiness to accept Australia-style trade relations with the EU if the aim of Canada-type bonds seems tough.

Also weighing on the Cable was the Independent’s news surrounding the Tory government’s preparedness for no-deal Brexit and an exit of the controversial aide Andrew Sabinksy.

On the other hand, the market’s risk-tone was weighed down by the coronavirus concerns, which in turn propelled the greenback. Even if the pace of the coronavirus from mainland China and the epicenter Hubei have started receding, doubt surrounding the authenticity and a higher toll among medical workers haunt the trade sentiment and support the USD.

Traders will now keep eyes on the January month Claimant Count Change and three-month to December Unemployment Rate, coupled with the Average Earning figures for the 3Mo/Yr). Considering the recently upbeat activity numbers from the UK, any more fundamental strength could push the BOE to leave its bearish bias.

Ahead of the release, TD Securities said, “while the Bank of England's last MPR looks for the unemployment rate to stay unchanged at 3.8% for the next 3-4 months, we look for an uptick to 3.9% in December (mkt 3.8%), with the potential for another pop higher in January. For wage growth, we look for the recent pattern of deceleration to continue, with headline wage growth slowing to 3.0% y/y (mkt 3.0%), and private sector regular pay to 3.3% y/y (mkt: 3.3%). For the latter measure, the short-term trend growth rate has more than halved from a peak of 5.0% on a 3m/3m annualized basis in July to 2.2% as of November.”

Technical Analysis

With the clear break of a one-week-old support line (now resistance at 1.3015), GBP/USD is expected to revisit February 10 top near 1.2950 ahead of targeting the monthly bottom surrounding 1.2870.

Additional important levels

Overview
Today last price 1.2996
Today Daily Change -0.0006
Today Daily Change % -0.05
Today daily open 1.3002
 
Trends
Daily SMA20 1.3026
Daily SMA50 1.3068
Daily SMA100 1.2936
Daily SMA200 1.2693
 
Levels
Previous Daily High 1.3054
Previous Daily Low 1.2998
Previous Weekly High 1.307
Previous Weekly Low 1.2872
Previous Monthly High 1.3281
Previous Monthly Low 1.2954
Daily Fibonacci 38.2% 1.3019
Daily Fibonacci 61.8% 1.3033
Daily Pivot Point S1 1.2982
Daily Pivot Point S2 1.2962
Daily Pivot Point S3 1.2926
Daily Pivot Point R1 1.3038
Daily Pivot Point R2 1.3074
Daily Pivot Point R3 1.3094

 

 

Share: Feed news

Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers. The author will not be held responsible for information that is found at the end of links posted on this page.

If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.

FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.

The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.

Recommended content


Recommended content

Editors’ Picks

AUD/USD posts modest gains above 0.6600 amid weak UoM Consumer Sentiment data

AUD/USD posts modest gains above 0.6600 amid weak UoM Consumer Sentiment data

The AUD/USD pair snaps the two-day losing streak near 0.6615 amid the consolidation of the US Dollar in Monday’s early Asian session. Meanwhile, the US Dollar Index hovers around near 105.50 after retracing from its highest level since early May near 105.80.

AUD/USD News

EUR/USD: consolidates around 1.0700, just above one-and-a-half-month low touched on Friday

EUR/USD: consolidates around 1.0700, just above one-and-a-half-month low touched on Friday

EUR/USD struggles to build on Friday’s bounce from its lowest level since early May. Political uncertainty in Europe continues to undermine the Euro and cap the upside. The Fed’s hawkish outlook acts as a tailwind for the USD and favors bearish traders. 

EUR/USD News

Gold attracts some sellers below $2,350, eyes on Eurozone political concerns

Gold attracts some sellers below $2,350, eyes on Eurozone political concerns

Gold price trades on a softer note near $2,325 during the early Asian trading hours on Monday. The speculation that US interest rates will stay higher for longer, with the median projection from Federal Reserve officials calling for one interest rate cut this year, has lifted the Greenback broadly.

Gold News

Bitcoin active addresses hit lowest level in five years, BTC ranges below $67,000

Bitcoin active addresses hit lowest level in five years, BTC ranges below $67,000

Bitcoin, the largest asset by market capitalization, has noted a decline in its active address count per data from Glassnode. A decline in active addresses is typical at a time during a surge in Bitcoin transaction fees.

Read more

Week ahead: RBA, SNB and BoE next to decide, CPI and PMI data also on tap

Week ahead: RBA, SNB and BoE next to decide, CPI and PMI data also on tap

It will be another central-bank-heavy week with the RBA, SNB and BoE. Retail sales will be the highlight in the United States. Plenty of other data also on the way, including flash PMIs and UK CPI.

Read more

Forex MAJORS

Cryptocurrencies

Signatures