- GBP/USD refusing to continue Dollar slide.
- Dollar advancing on rising bond yields.
- UK Employment, Earnings slated for 09:30.
GBP/USD traded sideways on Tuesday with the Sterling staunchly refusing to give up further ground to the US Dollar. The pair is down slightly ahead of the European market session, currently trading into the sub-1.3990 region.
It’s a data-loaded Wednesday for the GBP/USD today with Average Earnings growth, ILO 3-month Unemployment Rate, Claimant Count, and Public Sector Net Borrowing, all dropping at 09:30 GMT. The primary focus will be on ILO Unemployment and Average Earnings, with market forecasters anticipating both key indicators to hold at their previous readings of 4.3% for ILO Unemployment and 2.5% in Average Earnings. Analysts at Westpac are bucking the forecast trend, calling for a 2.6% increase in year-on-year figures for Average Earnings, and are also anticipating a healthy beat in the employment figures as well.
The Greenback has been buoyed higher by rising bond yields, but the Sterling continues to fight back as positive data continues to boost the UK’s economic outlook and the Bank of England (BoE) prepares to begin lifting interest rates, with many participants expecting the first rate lift in May. The GBP strength may get challenged by US data later in the day, with the Markit PMI Index at 14:45 and FOMC Minutes at 19:00.
The pair has halted the latest Dollar-based slide and the price is currently consolidating on support from the 8-day EMA. GBP/USD recently rebounded from support at the 34 EMA near 1.3831 but is still trading below the recent high of 1.4344 made in January. The pair is currently straddled by support and resistance at 1.3764 and 1.4142 respectively, while a further push lower will find support at 1.3655 and buyers will face pressure from 1.4259 and the previous high of 1.4344.