GBP/USD remains in familiar territory ahead of UK earnings, bulls fear a blowout

The GBP/USD ranged all last week, and the pair is still staunchly trapped within the boundaries, trading near 1.3550 ahead of a hectic London market session for Tuesday. Today brings the UK's jobs figures for the first quarter of 2018 into March, which drop at 08:30 GMT. Average Earnings excluding bonuses is expected to tick up slightly from 2.8% to 2.9%, while Average Earnings with bonuses is expected to contract, from 2.8% to 2.6%. Shortly after that at 09:00 GMT will be the Inflation Report Hearings from the Treasury Committee of the House of Commons, though the report will likely get swamped over by action from earnings.

UK wage growth Preview: Accelerating wages are set to support Sterling

As FXStreet's Yohay Elam outlined for trading the earnings figures if the actual results beat expectations, "if it comes out at higher than expected with a relative deviation of +1.69 or higher (2.74% or higher in actual terms), the pair may go up reaching a range of 40 pips in the first 15 minutes and 77 pips in the following 4 hours. $1.3615 was the high point in early May and also a level of resistance early in the year. $1.3700 is a round number and also a swing low that was seen on March 1st. Further up, $1.3770 was a swing low in mid-March."

However, a miss does not bode well, and Yohay continued, "if it comes out lower than expected at a relative deviation of -1.72 or less (2.46% or lower in actual terms), the GBP/USD may go down reaching a range of 50 pips in the first 15 minutes and 85 pips in the following 4 hours. The round $1.3500 level was a cushion on May 11th. It is followed by $1.3455 which was the low point in early May and also in mid-January. If that crucial line is broken, the next support level is only $1.3300 which dates back to 2017."

Sterling bulls will be hoping for a positive spin to numbers today, as the GBP has taken a beating in markets thanks to a suddenly-dovish Bank of England (BoE) that balked at souring economic data for the UK and had to recently waffle on a highly-expected rate hike in May.

GBP/USD levels to watch

The Sterling's lack of direction lately has begun to spoil technical indicators, and as FXStreet's Chief Analyst Valeria Bednarik noted, "the pair has been confined to a tight trading range pretty much since the month started, with a 4-month low in the way at 1.3459, and selling interest capping rallies on attempts to advance beyond the 1.3600 level. The current stability could be broken with the employment report, but directional follow-through afterward is still unclear, as the Pound has no fundamental background to rally, while the dollar is on a downward corrective stage. In the 4 hours chart, the pair presents a neutral-to-positive stance, trading above a flat 20 SMA, while the Momentum indicator heads north above its mid-line, while the RSI losses upward strength and currently consolidates around 53."

Support levels: 1.3550 1.3500 1.3460  

Resistance levels: 1.3610 1.3660 1.3700