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GBP/USD beginning to sour ahead of UK’s earnings figures

  • Sterling losing its nerve ahead of earnings figures.
  • Dovish BoE has left the GBP in a tight spot.

The GBP/USD is trading back into 1.3550, and the pair is hesitating to the downside ahead of the UK’s earnings report.

08:30 GMT brings the UK’s Average earnings, a high-impact release that could see the Sterling make some moves depending on how the data drops.  Average Earnings excluding bonuses is expected to tick up slightly from 2.8% to 2.9%, while Average Earnings with bonuses is expected to contract, from 2.8% to 2.6%.

GBP/USD remains in familiar territory ahead of UK earnings, bulls fear a blowout

All eyes will be on the earnings numbers this session, as the Bank of England (BoE) has had to walk back its hawkish stance and pull the plug on a widely-expected rate hike for May, sending the GBP tumbling as the BoE tries to upright itself amidst a wave of disappointing economic figures as the “bad weather” contraction from the first quarter continues to spill over into a general slowdown across the UK’s economy.

GBP/USD levels to watch

The Sterling’s lack of direction lately has begun to spoil technical indicators, and as FXStreet’s Chief Analyst Valeria Bednarik noted, “the pair has been confined to a tight trading range pretty much since the month started, with a 4-month low in the way at 1.3459, and selling interest capping rallies on attempts to advance beyond the 1.3600 level. The current stability could be broken with the employment report, but directional follow-through afterward is still unclear, as the Pound has no fundamental background to rally, while the dollar is on a downward corrective stage. In the 4 hours chart, the pair presents a neutral-to-positive stance, trading above a flat 20 SMA, while the Momentum indicator heads north above its mid-line, while the RSI losses upward strength and currently consolidates around 53.”

Support levels: 1.3550 1.3500 1.3460  

Resistance levels: 1.3610 1.3660 1.3700

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