GBP/USD grinds near 1.2700 amid mixed UK employment news, focus on Fed Minutes, US NFP


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  • GBP/USD remains sidelined after rising the most in a fortnight, as well as rising in three consecutive quarters.
  • UK Health Secretary eyes fresh talks with doctors amid looming health crisis on planned July strike of healthcare workers.
  • Fears of British economic recession gain momentum after unimpressive UK data but BoE hawks defend Cable buyers.
  • Pound Sterling has fewer data at home, US calendar can entertain traders.

GBP/USD flirts with the 1.2700 round figure as bulls seek more clues to defend the previous day’s run-up amid a sluggish start to the key week. That said, the Cable pair’s recent inaction could also be linked to the mixed headlines about the UK’s employment and growth conditions, as well as a lack of clear market reaction to the news about the US-China talks.

The UK Times came out with the news suggesting British Health Secretary Steve Barclay’s willingness to give doctors a bigger pay rise, calling for an end to consultant strikes in order to resume negotiations. “Barclay’s admission came as the head of the NHS (National Health Services) warned that the disruption to routine healthcare would become “more significant” this month,” said the news. It should be noted that the UK’s employment report appeared mixed and signaled easing of the labor crunch.

Elsewhere, a senior US Treasury official, as well as China Treasury Department, both recently confirmed US Treasury Secretary Janet Yellen’s China visit during July 06-09 period. While the news appears positive for the sentiment on the front, the details seem less impressive as US Treasury Secretary Yellen is likely to flag concerns about human rights abuses against the Uyghur Muslim minority, China's recent move to ban sales of Micron Technology memory chips, and moves by China against foreign due diligence and consulting firms, per Reuters.

It should be noted that Friday’s softer US inflation clues triggered the market’s risk-on mood and underpinned the GBP/USD pair’s run-up. Even so, the Cable pair dropped for the last two consecutive weeks amid fears of the UK recession. That said, the UK’s first quarter (Q1) 2023 GDP matches 0.1% QoQ and 0.2% YoY forecasts, per the latest readings.

On Friday, the Federal Reserve’s (Fed) preferred inflation gauge, namely the US Personal Consumption Expenditure (PCE) Price Index, poked hawkish expectations from the US central bank with the smallest yearly gain in six months. The same joined absence of any major hawkish comments from the US central bank officials, after a slew of Fed statements earlier in the last week, to favor the GBP/USD bulls.

Against this backdrop, S&P500 Futures grind higher by tracing upbeat Wall Street performance whereas the US Treasury bond yields remain firmer.

Moving on, the final readings of the UK’s S&P Global/CIPS Manufacturing PMI for June will precede the US ISM Manufacturing PMI for the said month to direct intraday moves of the GBP/USD pair. However, major attention will be given to this week’s Federal Open Market Committee (FOMC) Monetary policy meeting Minutes and the US jobs report.

Technical analysis

A convergence of the fortnight-old descending resistance line and a 10-DMA challenges GBP/USD bulls around 1.2710.

GBP/USD

Overview
Today last price 1.2696
Today Daily Change -0.0004
Today Daily Change % -0.03
Today daily open 1.27
 
Trends
Daily SMA20 1.2652
Daily SMA50 1.2549
Daily SMA100 1.2379
Daily SMA200 1.2112
 
Levels
Previous Daily High 1.2728
Previous Daily Low 1.2599
Previous Weekly High 1.276
Previous Weekly Low 1.2591
Previous Monthly High 1.2848
Previous Monthly Low 1.2369
Daily Fibonacci 38.2% 1.2679
Daily Fibonacci 61.8% 1.2648
Daily Pivot Point S1 1.2623
Daily Pivot Point S2 1.2547
Daily Pivot Point S3 1.2495
Daily Pivot Point R1 1.2752
Daily Pivot Point R2 1.2804
Daily Pivot Point R3 1.2881

 

 

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