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GBP/USD finds support near 1.3000, struggles to erase daily losses

  • US Dollar Index continues to float above 99.
  • PM Johnson's spokesman says UK is not seeking "anything special" in trade deal with EU.
  • Unemployment Rate in UK is expected to stay unchanged at 3.8%.

The GBP/USD pair closed the previous week 150 pips higher as the British pound gathered strength after Prime Minister Boris Johnson appointed Rishi Sunak, who is expected to ramp up fiscal spending, as the new  Chancellor of the Exchequer. However, the pair started the new week on the back foot and fell to a daily low of 1.3003 before going into a consolidation phase. As of writing, the pair was down 0.25% on the day at 1.3010.

Earlier in the day, PM Johnson's spokesman said that they were not seeking "anything special" from the EU in trade negotiations and this stance brought in modest selling pressure on the British pound. "We are ready to negotiate now, we want the relationship to be based on friendly cooperation," the spokesman added.

Focus shifts to UK employment data

On the other hand, the greenback preserves its strength at the start of the week and makes it difficult for the pair to stage a rebound. Although US financial markets are closed in observance of the Presidents' Day, the US Dollar Index, which added 0.5% last week, is staying at its highest level since early October at 99.17.

On Tuesday, the UK's Office for National Statistics (ONS) will release the Claimant Count Change and ILO Unemployment Rate data. Analysts' see the Claimant Count Change to come in at +22.6K in January and expect the ILO Unemployment Rate to remain unchanged at 3.8%.

Technical levels to watch for

 

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