GBP/USD: Mildly bid around 9-week old support-line

The prices bounce off more than two-month-old ascending trend-line during early Wednesday.
The UK CPI will be in focus with Brexit news reports likely offering intermediate moves.

Anil Panchal FXStreet

GBP/USD trades near 1.3050 during the early Asian session on Wednesday. The pair cable remained soft on Tuesday due to mixed employment data but is currently recovering from an upward sloping support-line stretched since February 14.

The British jobs report flashed mixed signals yesterday with the unemployment rate and average earnings including bonus holding their 3.9% and 3.5% respective priors. However, higher than expected 20.0K claimant count change to 28.3K and soft average earnings excluding bonus at 3.4% versus 3.5% previous gained major market attention.

News reports concerning the deadlock in the cross-party Brexit talks were also weighing on the prices during previous-day whereas little importance was given to the US industrial production that dropped -0.1% against +0.2% forecast during March.

Traders mildly bid the Cable during early-day expecting more than two-month-old support-line to trigger the up-move.

Coming up in the focus will be the UK consumer price index (CPI) figure for March. The headline inflation gauge is likely to increase to 2.0% from 1.9% on a YoY basis but soften to 0.3% from 0.5% on a monthly format.

GBP/USD Technical Analysis

Given the quote’s recent U-turn, chances of it heading towards the key 1.3100 – 1.3105 resistance-confluence comprising 50-day simple moving average (SMA) level and a five-week long descending trend-line are much brighter. Should prices rally beyond 1.3105, 1.3130 and 1.3200 can come alive on the chart.

In a case where the support-line figure of 1.3030 fails to limit the pair’s downside, 200-day SMA level of 1.2970 and 1.2950 including 100-day SMA could gain market attention.

Author

Anil Panchal

FXStreet

Anil Panchal has nearly 15 years of experience in tracking financial markets. With a keen interest in macroeconomics, Anil aptly tracks global news/updates and stays well-informed about the global financial moves and their implications.

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