GBP/USD advances on a slow Monday, awaiting key data

• GBP/USD is seeing a slight rally ahead of Tuesday’s data reading.
• A quiet Monday to give way to an economic agenda full of data.
• Notable data: UK wages and labor, US CPI

GBP/USD hit Monday’s highs near 1.2280 as markets position themselves ahead of Tuesday’s data, with UK wages and jobs data hitting markets early in the London session ahead of that the US Consumer Price Index (CPI) inflation figures will fall on investors at midday.

In the UK, average earnings (excluding premiums) are expected to moderate for the 3rd quarter, with a downward forecast of 7.8% to 7.7%; For its part, premium earnings will accelerate downward, with a downward forecast of 8.1% to 7.4%.

Investors are hoping for an improvement (or at least no decline) in the UK Employment and Claims figures. In the UK, the employment outlook last contracted in September, with a drop of 82,000 people in employment, while claimants for unemployment benefits rose by almost 20,500 people.

US CPI inflation is generally expected to remain stable at the annualized level, with slight declines in the month-on-month figures. The US headline CPI for the year through October is expected to decline from 3.7% to 3.3%.

Monthly CPI inflation is expected to be a moderate 0.1% in October, down from 0.4% in September.

GBP/USD Technical Outlook

The British pound’s gentle bounce on Monday follows last Friday’s rebound from a weekly low near 1.2190, breaking through an intraday descending trend line from last week’s high near 1.2425.

The pair is approaching the 200 hourly simple moving average (SMA) again, which currently stands at 1.2260.

The pair is establishing a short-term technical support zone near 1.2240, and as long as the downside remains limited, the upside will have a free way to crash against the technical resistance barrier at the 1.2300 zone.

GBP/USD Hourly Chart

GBP/USD Technical Levels