GBP/USD digesting UK jobs data-led volatile swings, focus shifts to US macro data
• UK jobs report fails to provide any meaningful bullish impetus.
• Broad-based USD slump extends some support.
• US CPI/monthly retail sales data hold the key.
The GBP/USD pair faded UK jobs data-led bullish spike beyond the 1.3200 handle and quickly retreated over 75-pips from session tops, albeit seems to have some support near the 1.3135 region.
The British Pound gained some positive traction following the release of slightly better-than-expected UK employment figures. The up-move, however, turned out to be short-lived as dismal wage growth dampened prospects of any additional BoE rate hike action in the near future.
• UK: Drop in jobs cast doubt over 2018 rate hikes - ING
Despite the unemployment rate holding steady at a 42-year low, the squeeze on wages now seems to have reinforced expectations that the UK inflation might be peaking and prompted some fresh selling at higher levels.
Meanwhile, persistent greenback selling bias, with the key US Dollar Index slumping to its lowest level in three weeks on fading optimism over the US tax overhaul legislation, extended some support and helped limit deeper losses, at least for the time being.
Currently trying to stabilize around the 1.3170 region, investors' focus now shifts to the key US macro data - CPI print and monthly retail sales data, which might influence December Fed rate hike expectations and eventually provide some fresh impetus.
Technical levels to watch
A clear break through the 1.3200 handle now seems to lift the pair towards 1.3230-40 intermediate hurdle en-route the 1.3300 handle. On the downside, 1.3135 area now becomes an immediate support to defend, which if broken might drag the pair below the 1.3100 handle back towards 1.3070-60 strong support area.