GBP/USD: Further downside in play ahead of a Big week?
- DXY offered in Asia.
- Mixed US jobs data.
- The UK PM May’s cabinet meeting eyed.
The rebound in the GBP/USD pair lost legs just ahead of 1.34 handle, with the bulls now on the defensive awaiting fresh impetus from the plenty of risk events lined up in the week ahead.
GBP/USD: 1.3350 still in sight
The Cable remains better bid so far this Monday, consolidating the recovery from mid-1.33s as the dust settles over the historic Brexit deal aftermath, with the focus now shifting on the fundamentals alongside fresh development around the Brexit deal.
The US dollar ran through fresh offers in Asian, as the Asian traders reacted to the weak wage growth data in the US labor market report released last Friday, aiding the recovery in GBP/USD. The US States Average Hourly Earnings (MoM) registered at 0.2%, below expectations (0.3%) in November.
However, further upside appears limited, as the divergent monetary policy outlooks between the Fed and BOE will be back in play ahead of the FOMC decision due out this Wednesday, especially after the BOE delivered a dovish rate hike last month.
Meanwhile, markets look forward to the UK PM Theresa May’s cabinet meeting scheduled later today, with the key agenda on the Brexit negotiations ahead of this week’s EU Summit.
GBP/USD Technical Levels
According to Valeria Bednarik, Chief Analyst at FXStreet: “Shorter term, and according to the 4 hours chart, the risk is towards the downside, yet also without confirming it, as the pair settled below its 20 SMA, now gaining downward traction, while technical indicators turned lower around their mid-lines. Support levels: 1.3345 1.3300 1.3260. Resistance levels: 1.3420 1.3460 1.3500.”