- GBP/USD added to the overnight positive move and gained some follow-through traction.
- Mostly upbeat UK employment details provided an additional boost to the British pound.
- The upside is likely to remain capped amid no-deal Brexit fears, BoE rate cut speculations.
The GBP/USD pair edged up and refreshed daily tops, around the 1.3035-40 region in reaction to better-than-expected UK employment details.
The pair added to the previous session’s modest uptick and gained some follow-through positive traction for the second consecutive session on Tuesday. The uptick got a minor lift during the early European session after the latest UK jobs report came in to show that the number of people claiming unemployment-related benefits fell to 14.9K in December.
UK jobs report provided a modest lift to the GBP
Adding to this, the previous month’s reading was also revised lower to 14.9K from 28.8K reported earlier. Meanwhile, the unemployment rate held steady at 3.8%, while Average Earnings (Including Bonus) recorded a growth of 3.2% during the three months to November as compared to consensus estimates pointing to a modest downtick to 3.1%.
The data, however, did little to dampen prospects for an imminent rate cut by the Bank of England at its upcoming meeting on January 30. This coupled with concerns that Britain will crash out of the European Union at the end of this year might hold investors from placing aggressive bullish bets and eventually keep a lid on any runaway rally for the major.
With the GBP price dynamics turning out to be an exclusive driver of the intraday price action, the pair seemed rather unaffected by the prevalent bullish sentiment surrounding the US dollar and thus, warrant some caution. Hence, it will be prudent to wait for some strong follow-through buying before positioning for any further near-term appreciating move.
Technical levels to watch