GBP/USD softens towards 1.2700 ahead of Tuesday’s UKJ labor figures, BoE Gov Bailey testimony

• GBP/USD slips back once again on Monday, dips into 1.2715.
• UK labor figures due on Tuesday.
• BoE Governor Bailey to testify on state of economy before UK Parliament.

The GBP/USD fell back once more on Monday, testing 1.2715 after a short-lived rally at the Modnay open reversed course. The Pound Sterling (GBP) couldn’t get over 1.2765 against the US Dollar (USD), sliding 0.4% peak-to-trough before consolidating in holiday-thinned market volumes during the US extended weekend in observance of Martin Luther King Day.

The UK’s Rightmove House Price Index rose 1.3% in January, compared to December’s -1.9%, while the annualized figure declined 0.7%, rebounding slightly from the previous period’s -1.1%. The MoM is a firm rebound in the headline figure, but still well below last May’s near-term peak of 1.8%.

Up next will be Tuesday’s UK Claimant Count Change, ILO Unemployment Rate, and Average Earnings for the annualized quarter ended in November.

December’s Claimant Count Change printed at 16K, while the ILO quarterly Unemployment Rate is forecast to hold steady at 4.2%. UK Average Earnings growth is expected to decline both with and without bonuses factored in, with Average Earnings Excluding Bonuses for the quarter through November expected to tick back from 7.3% to 6.6%.

Bank of England (BoE) Governor Andrew Bailey will be testifying before the Lords’ Economic Affairs Committee in London before departing to attend the World Economic Forum in Davos, Switzerland.

GBP/USD Technical Outlook

The GBP/USD is caught in a near-term sideways grind, with intraday prices getting caught up on the 200-hour Simple Moving Average (SMA) near 1.2720, while 1.2780 is proving to be a tricky technical ceiling for the pair to overcome.

Despite the pair stuck on the low side of the 1.2800 handle near December’s peak, the pair remains on the high end of momentum on daily candles, with the pair up 5.75% from October’s swing low of 1.2037.

GBP/USD Hourly Chart

GBP/USD Daily Chart

GBP/USD Technical Levels