The GBP/USD currency pair remains weak around 1.2210 in the beginning of this week, due to the upcoming UK jobs report, which is scheduled for Tuesday
The GBP/USD currency pair remains weak around 1.2210 in the beginning of this week, due to the upcoming UK jobs report, which is scheduled for Tuesday. Investors are keeping a close eye on this data that could tell us more about the near-term prospects of the pound. Recent bad news in the UK job market has put a damper on the Sterling, driving buyers away from the currency. At the same time, weakening of the US Dollar Index (DXY) has opened up opportunities for recovery gains.
According to the Financial Times, the UK in a Changing Europe and the Centre for European Reform think-tanks have released a statement reporting that, due to the cessation of free movement of labor with EU, post-Brexit UK economy is facing an economic shortfall that amounts to over 300,000 workers.
In addition, Reuters reported that teachers had associated with the strike organized by nurses, rail workers and other employees. As a result, they joined the labor protest. Reuters reported that the National Education Union (NEU) declared that it is organizing a strike on Feb. 1, which could potentially be Britain’s biggest day of coordinated industrial activity in many decades, with around 100,000 public sector workers participating.
The GBP/USD may be adversely impacted by some of the political issues that UK Prime Minister Rishi Sunak is currently facing. As reported by The Telegraph, the government had to backtrack on its Online Safety Bill following a Conservative revolt.
On Monday, Andrew Bailey, Governor of Bank of England (BOE) testified before the Treasury Select Committee in London, highlighting that inflation appears to be declining in a significant way this year.
Despite some potential drawbacks, a decline in the US Dollar Index (DXY) could be hugely beneficial for GBP/USD prices. This could be true regardless of any previously cited negative effects. Despite this, Cable pair traders are likely to be reluctant to make any decisions until the UK employment figures are released.
Despite expectations of no change in the UK’s Unemployment Rate for three months until November, Average Weekly Earnings could help in sustaining the GBP/USD . This could likely result in a firmer rate.
GBP/USD Technical Outlook
The GBPUSD pair is trading positively and looking to breach the 1.2300 barrier. The EMA50 provides a sustained support for this bullish momentum, allowing it to continue in the short term with an aim of reaching 1.2440 as its next stop. As a result, we still believe that the bullish trend will continue for the near future. It is essential for prices to remain above 1.2150 in order to meet the desired objectives.
Trading figures suggest that the market will fluctuate between 1.2200 and 1.2370 today, with 1.2200 as the support level and 1.2370 being the resistance.
The expected trend for today: Bullish
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