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

Source Fxstreet
  • 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

 

Disclaimer: For information purposes only. Past performance is not indicative of future results.
placeholder
The Fed will sit still on October 28 — but 100 of 100 economists now expect a December hikeA Reuters poll run October 16-20 found 94 of 100 economists expecting the Fed to hold at 3.75-4.00% on October 28 — and all 100 expecting a hike in December, against less than half a month earlier. The market is close to the same price, with CME FedWatch at roughly 17% for October and 82.8% for December. With the Fed in blackout since October 17, here are the five dates that decide the rest of the year, what each one is priced for, and the two directions each can take.
Author  Irene Q.
Oct 22, Thu
A Reuters poll run October 16-20 found 94 of 100 economists expecting the Fed to hold at 3.75-4.00% on October 28 — and all 100 expecting a hike in December, against less than half a month earlier. The market is close to the same price, with CME FedWatch at roughly 17% for October and 82.8% for December. With the Fed in blackout since October 17, here are the five dates that decide the rest of the year, what each one is priced for, and the two directions each can take.
placeholder
Big Tech's $800 billion AI bill faces its first real test — free cash flow is the judgeAlphabet and Microsoft report after the close on October 28, Amazon on October 29, with hyperscaler AI capex running near $800 billion a year. Meta's negative free cash flow and 9.40% drop on October 22 was the warning; this week's prints decide whether cloud growth and backlog can pay for the buildout. Here are the consensus numbers, the free-cash-flow table and the two-sided test.
Author  Irene Q.
Oct 26, Mon
Alphabet and Microsoft report after the close on October 28, Amazon on October 29, with hyperscaler AI capex running near $800 billion a year. Meta's negative free cash flow and 9.40% drop on October 22 was the warning; this week's prints decide whether cloud growth and backlog can pay for the buildout. Here are the consensus numbers, the free-cash-flow table and the two-sided test.
placeholder
Anthropic files for a $2 trillion IPO — the $80.7 billion loss is the decoy, the $450 billion compute bill is the riskAnthropic publicly filed its S-1 on October 26, revealing $16.29 billion of first-half revenue (+1,304% year over year) and a $80.7 billion net loss — of which $72.4 billion is a non-cash convertible-note charge. The real number is the $450 billion of signed, mostly non-cancelable compute commitments. Here is what the filing says, why NVDA, ARM and MU are the tradeable read-through, and the conditions that decide whether the AI trade passes its first public valuation test.
Author  Irene Q.
Oct 27, Tue
Anthropic publicly filed its S-1 on October 26, revealing $16.29 billion of first-half revenue (+1,304% year over year) and a $80.7 billion net loss — of which $72.4 billion is a non-cash convertible-note charge. The real number is the $450 billion of signed, mostly non-cancelable compute commitments. Here is what the filing says, why NVDA, ARM and MU are the tradeable read-through, and the conditions that decide whether the AI trade passes its first public valuation test.
placeholder
Fed October Rate Decision Preview: Rate Hike Pause Has Become Consensus, How Will US Stocks, Dollar, and Gold React?The Federal Reserve will announce its October interest rate decision at 14:00 Eastern Time on October 28, and Fed Chair Warsh will hold a press conference at 14:30. Markets currently wide
Author  TradingKey
Oct 27, Tue
The Federal Reserve will announce its October interest rate decision at 14:00 Eastern Time on October 28, and Fed Chair Warsh will hold a press conference at 14:30. Markets currently wide
placeholder
Brent's $115 front month sits $4.6 above January — the $14 spread to WTI is the supply-risk premiumDecember Brent trades at $115.29 while January is $110.71, a $4.58 backwardation. The December Brent-WTI spread is $14.2, versus a $3-5 normal. That gap, not the headline, is where the Middle East supply risk is priced. Here is what the curve says, why the December contract's expiry on October 30 will mechanically cut the headline by $4.6, and the 108.81 neckline that decides the next move.
Author  Irene Q.
19 hours ago
December Brent trades at $115.29 while January is $110.71, a $4.58 backwardation. The December Brent-WTI spread is $14.2, versus a $3-5 normal. That gap, not the headline, is where the Middle East supply risk is priced. Here is what the curve says, why the December contract's expiry on October 30 will mechanically cut the headline by $4.6, and the 108.81 neckline that decides the next move.
Related Instrument
goTop
quote