The sterling pound faces pressure while the data of the labor market of the weak United Kingdom are paved the way to cuts of the BOE rates

• The sterling pound faces pressure against its peers due to new data that shows that the United Kingdom labor market is cooling.
• The Weak United Kingdom Labor Market data raided the way for more interest rate cuts on the part of the BOE.
• Investors expect US inflation on Tuesday as the next catalyst for the GBP/USD torque.

The sterling pound (GBP) is quoted with caution in front of its peers on Tuesday after the publication of the United Kingdom labor market for the three months that ended in March. The National Statistics Office (ONS) reported that the ILO unemployment rate accelerated to 4.5%, as expected, from 4.4% in the three months that ended in February. In the same period, the economy added new workers, significantly less than the previous 206k publication.

The growth of employment in the United Kingdom is slowed, reflecting the impact of the increase in employers’ contribution to social security schemes and caution among business owners in advance of the tariffs of the president of USA (USA) Donald Trump. The report did not capture any effect of the tariff reduction agreement between the US and the United Kingdom, since it was announced long after data collection.

In addition, average gain data is also unfavorable for the British currency. The average profits excluding bonuses, a key measure of salary growth, moderately grew by 5.6%, compared to estimates of 5.7%and the previous 5.9%publication. The salary growth measure that includes bonuses increased by 5.5%, faster than the expectations of 5.2%but slower than the previous 5.6%reading.

Employment cooling and softening of salary growth are paved the way for more interest rate cuts by the Bank of England (BOE). Last week, the BOE cut its rates of interest in 25 basic points (PB) to 4.25% and maintained an “gradual and careful” monetary expansion approach.

This week, investors prepare for more volatility in the sterling pound, since the preliminary data of the GDP of the United Kingdom of the first quarter and industrial and manufacturing production will be published on Thursday. The economy of the United Kingdom is expected to have grown 0.6% in the first quarter of the year. Before that, the data of the IPC of the USA during the session on Tuesday.

What moves the market today: the pound sterling progresses against the US dollar, the US CPI is expected.

• The pound sterling advances to 1,3210 against the US dollar (USD) during the European negotiation hours on Tuesday. The GBP/USD torque climbs while the US dollar takes a pause after a strong upward movement on Monday. The dollar index (DXY), which follows the value of the dollar against six main currencies, maintains the profits of the previous day around 101.60.
• The USD index shot Monday after the US and China agreed a truce of 90 days after a two -day meeting in Switzerland during the weekend. In a joint statement, USA and China announced that they have reduced tariffs by 115 percentage points. Washington reported that the import rights about Beijing still have the 20% surcharge on fentanil, but said there have been “constructive discussions” to solve it. However, Beijing reported in a statement during European negotiation hours that the problem of fentanyl is an US issue and not its responsibility. The China Ministry of Foreign Relations added that 20% tariffs imposed on China due to this matter are “unreasonable”.
• The strong upward movement of the US dollar and the rebound of US shares after the temporary commercial truce between the two greatest powers of the world reflect that the confidence of investors in the US economy has increased. However, Federal Reserve officials (FED) have not ruled out the fears of an increase in consumer inflation expectations.
• On Monday, the governor of the Fed, Adriana Kugler, said that tariffs remain high and will result in an increase in inflationary pressures and an economic deceleration. “[Yo] I still expect an increase in prices and a slowdown in the economy, although not at the same rate as before, “said Kugler, minimizing the possibilities of reducing interest rates. Kugler also mentioned that the 90 -day break in import rights at levels that threatened to close bilateral trade reduces the possibilities that the US Central Bank need to lower interest rates in response to an economic deceleration, Reuters
• Looking ahead, the next trigger for the US dollar will be the US consumer price index (CPI) for April, which will be published at 12:30 GMT. It is estimated that the general and underlying CPI of the US have constantly grown by 2.4% and 2.8% year -on -year, respectively. Month by month, both figures are expected to have increased by 0.3%.

Technical analysis: The sterling pound sees more disadvantages after the breakdown of the H&S

The sterling pound rises to 1,3200 in front of the US dollar Tuesday. However, the perspective From the pair he has become bassist after breaking a head and shoulder formation (H&S) in the temporary frame of four hours. A break in the H&S graphic pattern leads to a bassist reversal, and its formation near a critical resistance level increases its credibility.

The cable slides near the exponential mobile (EMA) average of 200 periods, which is around 1,3190, suggesting a bearish trend.

The relative force index (RSI) of 14 periods bounces above 40.00 after sliding about 33.00, indicating that the downward impulse has been deactivated. However, the bearish bias still prevails.

On the positive side, the maximum of three years of 1,3445 will be a key obstacle to the torque. Looking down, the psychological level of 1.3000 will act as an important support area.