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GBP/USD attempts recovery near 1.3150 ahead of UK jobs

  • Will the recovery sustain?
  • Derives support from subdued DXY and weaker USTs.
  • Eyes on the UK jobs, US CPI, and retail sales.

The GBP/USD pair moved-off lows, but remains on the offers as we head in early Europe, with the GBP bulls on the back foot ahead of the key UK jobs report.

GBP/USD capped by 10-DMA at 1.3131

Having witnessed a volatile session a day before, the spot has entered a quiet trading mode, although attempts a minor bounce from 1.3130 lows, underpinned by persistent weakness seen around the US dollar against its main competitors.

The greenback remains on the defensive, in response to looming uncertainty over the US tax reforms, which continues to undermine the sentiment around the US rates.

However, the recovery appears to lack follow-through, as markets digest the latest dismal UK CPI data, while ongoing Brexit negotiations between the UK and EU also continue to keep the downside risks intact in the pound.

Markets also turn nervous ahead of the key UK employment data and the US inflation numbers due later today, leaving the rates in the red zone near mid-1.31s.

GBP/USD Technical View

Jim Langlands at FX Charts, provides key technical levels to watch out: “On the topside, resistance will again be seen at 1.3180/85, while back above 1.3200 would find good offers at around 1.3230, beyond which could see a run back to 1.3250 and eventually to 1.3300. On the downside, support will be now seen at 1.3115 ahead of the rising trend support/session low at 1.3075 and then at 1.3000 although I don’t think we head down here today.”

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