- Sterling managed to halt a seven-day bear run this week, but bullish momentum remains limited.
- Tuesday’s earnings report could see the GBP make a much-needed recovery if the reading manages to hit expectations.
The GBP/USD is trading into 1.2770 ahead of London’s upcoming market session for Tuesday, as well as a fresh reading of the UK’s Unemployment Rate.
Brexit continues to be a thorn in the side of Sterling traders, and hard-line Brexiteers are set to force a showdown with Prime Minister Theresa May and her current negotiation strategy with the European Union, and Conservatives are planning on releasing the ‘blueprint’ for a hard Brexit after vowing to outright reject any proposal from the Chequers.
On the data docket, Tuesday sees the UK’s Unemployment Rate at 08:30 GMT, alongside wage figures with Average Earnings excluding bonuses expected to hold steady at 2.7%. The ILO 3-Month Unemployment Rate into June is expected to also remain steady at 4.2%, while July’s Claimant Count Change is forecast at 3.8 thousand, compared to the previous reading of 7.8 thousand.
The Sterling has taken a severe misstep against the US Dollar, down over -4.4% against the Greenback from a two-week high as risk aversion across the broader markets on Turkish contagion fears sees traders leaning into the US Dollar, and the GBP is looking for a bullish push from economic figures today after closing in the red for seven straight trading days.
GBP/USD levels to watch
The Sterling-Dollar pairing is heavily bearish across technical indicators, and hopes of a bullish recovery will likely be pinned to today’s earnings data, while indicators flatten out after Monday’s tight range according to FXStreet’s Valeria Bednarik: “in the meantime, the dollar remains strong against its high-yielding rivals, and the pair looking bearish short-term, as in the 4 hours chart the price remains well below a firmly bearish 20 SMA, while technical indicators remain within negative levels, with the Momentum flat amid the limited intraday range and the RSI resuming its decline after correcting extreme oversold readings.”
Support levels: 1.2720 1.2680 1.2645
Resistance levels: 1.2795 1.2830 1.2865
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