GBP/USD: Consolidation likely near term – OCBC

The Pound Sterling (GBP) rose on betterthan-expected labor market report. GBP was last at 1.2693 against the US Dollar (USD), OCBC’s FX analyst Frances Cheung and Christopher Wong note.

Focus this week on BoE MPC

“Employment change jumped +173k (vs. 5k expected) while weekly earnings saw a significant jump of 5.2% YoY (vs. 4.6% expected).”

“Focus this week on BoE MPC (Thu) and retail sales (Fri). BoE MPC likely a nonevent as a hold is likely. The last MPC meeting (Nov) saw BoE putting an emphasis on making sure inflation stays close to target. This reinforces the view for a gradual approach to removing restraint.”

“Mild bullish momentum on daily chart intact while rise in RSI slowed. Consolidation likely. Resistance at 1.2730 (61.8% fibo retracement of 2024 low to high), 1.2830 levels (50, 200 DMAs). Support at 1.2680 (21 DMA), 1.2610 and 1.2570 (76.4% fibo).