The GBP/USD pair is facing downward pressure, hovering around 1.3050 in the American session. Despite a brief uptick from positive UK employment data earlier today, the pair is finding it challenging to maintain its position amidst a market atmosphere filled with caution.
Earlier today, the UK’s Office for National Statistics (ONS) reported a slight decrease in the ILO Unemployment Rate to 4.1% for the three months ending in July, aligning with market expectations. Employment numbers showed a significant improvement, with a rise of 265,000 jobs during the same period. However, annual wage growth, indicated by the Average Earnings Excluding Bonus, slowed to 5.1%.
Looking ahead, all eyes are on the upcoming US inflation data scheduled for release on Wednesday, with the August Consumer Price Index (CPI) in focus. Headline inflation is expected to dip to 2.6% YoY, while core inflation is forecasted to remain stable at 3.2% YoY. Additionally, Thursday will see the release of Producer Price Index (PPI) data, with expectations of a decrease in headline inflation to 1.7% YoY. Market expectations for Federal Reserve easing have also stabilized, with a reduced likelihood of a 50 basis point rate cut this month and anticipation of 100-125 basis points of easing by year-end.
GBP/USD Technical Analysis
The GBP/USD has slipped below the 20-day Simple Moving Average, indicating a bearish outlook in the short-term. However, the pair is holding above the 100 and 200-day SMAs, maintaining an overall positive outlook.
Indicators such as the Relative Strength Index (RSI) and the Moving Average Convergence Divergence (MACD) have flattened in negative territories, suggesting that the current bearish pressure is not a significant threat.
GBP/USD Daily Chart
Analysis:
The GBP/USD pair is facing downward pressure amid a cautious market sentiment, with focus shifting to the upcoming US CPI data release and the US presidential debate. Positive UK employment data provided a temporary boost, but the pair struggles to maintain its position. Investors are closely watching inflation data and Fed easing expectations, which could impact the pair’s movement in the coming days. From a technical perspective, the pair’s short-term outlook is bearish, but overall sentiment remains positive as key moving averages are holding. Traders should monitor key economic indicators and market developments to make informed decisions about their investments in the GBP/USD pair.