“¢ Finds some support on stronger UK wage growth data/persistent USD selling.
“¢ Brexit uncertainties hold investors from placing aggressive bets and cap gains.
The GBP/USD pair extended its sideways consolidative price action through the mid-European session and is currently placed at the lower end of its daily trading range, around the 1.3075-70 region.
After yesterday’s attempted move higher, though once again failed to make it through the 1.3120-30 region, the pair edged lower on Tuesday but managed to find some support following the release of strong UK wage growth data.
This coupled with persistent US Dollar selling bias, amid expectations there interest rates will stay where they are at least until the end of this year, extended some additional support and helped limit any meaningful downfall.
Despite the positive factors, the pair remained well within the recent familiar trading range held over the past one week or so in wake of the lack of progress in the UK cross-party talks to break the Brexit deadlock.
Hence, it would be prudent to wait for a sustained break in either direction before positioning for the near-term trajectory as traders now look forward to a relatively thin US economic docket for some short-term impetus.
Technical levels to watch
Yohay Elam, FXStreet own Analyst writes: “Support awaits at 1.3050 that held the pair last week. Further down, 1.3030 provided support in the previous week. 1.2985 was April’s low and 1.2960 was the trough in March.”
“Resistance awaits at 1.3120 which capped the pair several times in recent weeks. 1.3200 is a round number and the high point in April. It is followed by 1.3270 which was a stubborn cap in late March,” he added further.
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