- The pound falls after weak UK employment data and returns to touch the 1.2430 support zone.
- The UK unemployment rate rose to 4.2% in the three months to February, compared to expectations for a reading of 4%.
- Investors' attention is focused on Wednesday's British CPI data, looking for more clues on the outlook for the BoE's monetary policy.
The British Pound has resumed its overall bearish trend during the London session on Tuesday. Dismal employment figures in the UK have supported the theory that the BoE could start cutting rates earlier than expected, which has punished the Pound.
The number of job seekers rose below expectations, but wage growth slowed to 6% annually in the three months to February, from 6.1% in the previous period. But above all, the unemployment rate increased to 4.2%, disappointing the market that had forecast a rate of 4%, unchanged from the previous month.
The US dollar maintains its bullish trend intact, fueled by the rise in US Treasury yields. The benchmark 10-year yield is trading at year-to-date highs near 4.70%. The 2-year yield, the most closely related to interest rate expectations, remains at the key 5% level.
Later on Tuesday, BoE Governor Bailey is expected to meet the press, although the highlight of the week in the UK will be Wednesday's CPI data, which is expected to have cooled significantly. Also on Tuesday, Fed Governor Jerome Powell is expected to participate in a roundtable in Washington. His comments on monetary policy could have some impact on US Dollar crosses.
GBP/USD Price Analysis: Technical Outlook
The bears have pushed the pair back to the bottom of the monthly descending channel, at 1.2430, which is being tested at the moment. Last Friday's low is just below, at 1.2430. A clear break of that support zone clears the way towards 1.2370. Below there is no support until 1.2220.
To the upside, the 1.2505 level should be broken to move towards 1.2565, where an outright order block could provide fresh impetus to the bears.
Source: Fx Street
I am Joshua Winder, a senior-level journalist and editor at World Stock Market. I specialize in covering news related to the stock market and economic trends. With more than 8 years of experience in this field, I have become an expert in financial reporting.
