Technical Analysis

Cable sits lower ahead of UK labour market report later today

GBP/USD trades at session lows below 1.2050 currently


The pair made an attempt to get back above 1.2100 yesterday but failed as offers and support-turned-resistance around 1.2102 kept price action in-check, favouring sellers still.

Since then, price has been creeping lower with sellers now pushing the agenda as the pair falls to a session low of 1.2042 and is lingering under 1.2050. The key level to any downside move this week remains the 1.2000 handle.

Looking ahead today, we’ll have the release of the UK labour market report but it isn’t going to be a game changer whatsoever. Wages have been solid over the past few months but it isn’t a focal point for the currency at this point in time.

A more solid report is indubitably good but it will come at the wrong time. Tighter labour market conditions isn’t going to change the BOE outlook and take away any of the current Brexit uncertainty. As such, it isn’t going to be significant.

If pound sellers do take some money off on the release, expect any reprieve the currency to be short-lived and be met with sellers again; especially if we move towards near-term resistance levels close to 1.2100 and the key hourly moving averages.

In the big picture:

GBP/USD W1 13-08

Nothing has changed since yesterday as price is holding below the broken trendline support @ 1.2087. The chart shows that sellers are now eyeing the 1.2000 handle and the 2017 low of 1.1986. A break below those levels could see a quick fall for cable to test the post-Brexit referendum low next as stops get taken out.

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