GBP/USD slides to its lowest level since November, eyes 1.2400 ahead of UK jobs data

Source Fxstreet
Apr 16, 2024 03:01
  • GBP/USD drops to a fresh YTD low and is pressured by a combination of factors.
  • Bets for more aggressive policy easing by the BoE continue to weigh on the GBP.
  • Reduced Fed rate cut bets underpin the USD and also contribute to the downfall.

The GBP/USD pair drifts lower for the third straight day on Tuesday – also marking the fourth day of a negative move in the previous five – and drops to its lowest level since November 17 during the Asian session. Spot prices currently trade around the 1.2420 region as traders now look to the UK monthly employment details for a fresh impetus.

According to the consensus estimates, the number of people claiming unemployment-related benefits are expected to rise to 17.2K from 16.8K previous and the jobless rate is seen edging higher from 3.9% to 4% during the three months to March. This could offer more evidence that the jobs market is cooling and reinforce bets for at least four rate cuts by the Bank of England (BoE) this year, starting in June, which should weigh on the British Pound (GBP) and drag the GBP/USD pair lower. 

Meanwhile, the immediate market reaction to a surprisingly stronger report is more likely to be limited in the wake of a strong bullish sentiment surrounding the US Dollar (USD), bolstered by hawkish Federal Reserve (Fed) expectations. Investors pushed back their expectations for the first interest rate cut by the Fed to September from June following the release of hotter-than-expected US consumer inflation figures. This keeps the US Treasury bond yields elevated and underpins the buck.

Apart from this, persistent geopolitical tensions stemming from the ongoing conflicts in the Middle East turn out to be another factor that benefits the Greenback's relative safe-haven status. This, in turn, suggests that the path of least resistance for the GBP/USD pair is to the downside and any attempted recovery might now be seen as a selling opportunity. Traders on Tuesday will further take cues from the US macro data and speeches by FOMC members, including Fed Chair Jerome Powell.

GBP/USD

Overview
Today last price 1.2423
Today Daily Change -0.0023
Today Daily Change % -0.18
Today daily open 1.2446
 
Trends
Daily SMA20 1.2615
Daily SMA50 1.2653
Daily SMA100 1.2667
Daily SMA200 1.2582
 
Levels
Previous Daily High 1.2499
Previous Daily Low 1.2436
Previous Weekly High 1.2709
Previous Weekly Low 1.2427
Previous Monthly High 1.2894
Previous Monthly Low 1.2575
Daily Fibonacci 38.2% 1.246
Daily Fibonacci 61.8% 1.2475
Daily Pivot Point S1 1.2421
Daily Pivot Point S2 1.2397
Daily Pivot Point S3 1.2358
Daily Pivot Point R1 1.2484
Daily Pivot Point R2 1.2523
Daily Pivot Point R3 1.2547

 

 

Disclaimer: For information purposes only. Past performance is not indicative of future results.
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