GBP/USD: A phase of upside consolidation ahead of UK jobs, US data & Fed

Having peaked near 1.2760 levels in the opening trades, the GBP/USD pair continues to trade around a flat-line near the mid-point of 1.27 handle, as markets remain wary ahead of the UK employment data, US CPI and FOMC verdict.

GBP/USD: A big day ahead

The bulls are seen consolidating the previous heavy gains and awaits the UK jobs report for the next push higher beyond the key support-turned resistance of 1.2770 levels. The UK labour market report is expected to show a decrease in the jobless claims, while the unemployment rate and hourly wages are expected to remain steady at 4.6% and 2.4% respectively.

Moreover, cautiousness sets into the markets ahead of the much-awaited Fed policy announcement, keeping the gains capped in the higher-yielding GBP/USD. Heading into the FOMC outcome, the USD index keeps range near four-day lows of 96.90, while the US yields tread cautiously, expectant of a rate hike and more hawkish bias from the Fed.

On Tuesday, cable witnessed a sharp pullback from ahead of multi-week lows of 1.2620 levels, as the bulls received fresh boost from solid UK CPI figures, while a profit-taking rally ahead of the key central banks’ events also drove the rate almost 1 big figure higher. UK CPI rises further in May, its highest since April 2012

Focus now remains on the UK jobs data, followed by the key US CPI and retail sales data, which will be reported ahead of the FOMC decision and economic projections.

GBP/USD Levels to consider            

Valeria Bednarik, Chief Analyst at FXStreet noted: “In the 4 hours chart, technical indicators were unable to present a clear follow-through beyond their mid-lines. In the same chart, the price is a handful of pips above a bearish 20 SMA, but below the post-election high at 1.2780, now the level to surpass to see the ongoing recovery extending. Support levels: 1.2705 1.2660 1.2635 Resistance levels: 1.2780 1.2830 1.2870.”