GBP/USD: A test of 1.2900 likely on solid UK jobs?

The GBP/USD pair extended its overnight consolidative mode into Asia, having stalled its tepid American recovery near 1.2880 levels, as investors turn wary ahead of the UK labour market report and FOMC minutes due later today.

GBP/USD finds buyers above 1.2850

The spot is seen treading water so far this session, as the bulls await the UK jobs report to take GBP/USD above the 1.29 handle. The UK claimant count change is expected to show 3.2k additions last month versus a 5.9k increase seen last, while the unemployment rate and hourly wages are expected to remain unchanged at 4.5% and 1.8% respectively.

Meanwhile, the sentiment around the GBP remains negatively affected, after the UK CPI data disappointed markets, keeping any recovery attempts limited in Cable. Also, renewed signs of optimism seen around the US economy, in the wake of upbeat retail sales data, continue to remain USD supportive, in turn exerting downward pressure on the major.

UK July CPI: A miss on expectations across all indicators

Looking ahead, the GBP/USD pair could gain some fresh impetus from the UK jobs data release. However, the main risk event for today remains the FOMC monetary policy meetings minutes due to be published in the American afternoon.

GBP/USD levels to consider             

Valeria Bednarik, Chief Analyst at FXStreet noted: “Having shed over 100 pips for the day, the pair is now consolidating around 1.2870, with the 4 hours chart showing that the price is well below a now bearish 20 SMA, while the Momentum indicator consolidates within negative territory and the RSI indicator in oversold levels, with no signs of upward corrective movement ahead. Support levels: 1.2830 1.2795 1.2760 Resistance levels: 1.2910 1.2950 1.2990.”