GBP/USD slips below 50-DMA support, drops to 1.2400 neighborhood

Haresh Menghani FXStreet

The GBP/USD pair extended mixed UK jobs data-led slide and has now slipped below the 50-day SMA important support near 1.2420 region.

Disappointment from the UK average earnings growth negated positive claimant count change data, showing an unexpected decline in the number of people claiming unemployment-related benefits. A weak wages data is seen as providing additional headroom for the Bank of England to maintain status-quo, at-least for the time being, and is weighing heavily on the British Pound.

In addition to this, Tuesday's hawkish comments from the Fed Chair Janet Yellen continues to underpin the greenback, with the key US Dollar Index adding on to overnight gains and rising to the strongest level since January 20, further collaborated to the offered tone around the major.

Next in focus would be the US economic docket, featuring the release of CPI print and monthly retail sales data, and would be looked upon for fresh impetus for the pair's movement during NA trading session.

Technical levels to watch

Currently trading around 1.2415-10 region, a follow through weakness below 1.2400 round figure mark might continue dragging the pair further towards Feb. 7 lows support near 1.2350-45 region before eventually breaking below 1.2300 handle towards testing its next support near 1.2260-55 horizontal zone.

Meanwhile on the upside, any recovery attempts might now face immediate resistance near 1.2435-40 region, which is closely followed by resistance near 1.2465-70 region. A convincing move back above 1.2470 resistance is likely to accelerate the recovery move, back above 1.2500 psychological mark, towards its next major hurdle near 1.2530-40 region.

1 Week
1 Month
1 Quarter

1 Week

Avg Forecast 1.2408

21% Bullish
50% Bearish
29% Sideways

Bias Bearish

1 Month

Avg Forecast 1.2358

29% Bullish
53% Bearish
18% Sideways

Bias Bearish

1 Quarter

Avg Forecast 1.2142

12% Bullish
68% Bearish
20% Sideways

Bias Bearish

Author

Haresh Menghani

FXStreet

Haresh Menghani is a detail-oriented professional with 10+ years of extensive experience in analysing the global financial markets.

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