The GBP/USD currency pair is currently maintaining its position above the 1.2650 threshold following a significant drop on Monday, which ended a three-day rally. Technical indicators suggest that there is limited bearish momentum in the near term. On the economic front, the upcoming JOLTS Job Openings data in the US is likely to draw attention.
After experiencing a decline of over 0.5% on Monday, the GBP/USD pair is now consolidating those losses, trading slightly higher early Tuesday. The strengthening of the US Dollar was influenced by a risk-averse market environment, which pushed it to perform better against its peers. Concurrently, US stock index futures are exhibiting a mixed performance, indicating a cautious sentiment among investors.
Despite its recent losses, Pound Sterling has shown resilience against the USD. Additionally, the EUR/GBP exchange rate has seen declines for four consecutive trading days, indicating that the Pound may be attracting capital that is leaving the Eurozone.
Looking ahead, the JOLTS Job Openings data for October will be released later today. A positive surprise, indicating job openings at or above 8 million, could enhance the USD’s strength against other currencies, putting further pressure on GBP/USD . Furthermore, Federal Reserve officials are scheduled to speak later in the day, and their comments may influence market expectations regarding potential rate cuts. Recent discussions among Fed policymakers indicate hesitance concerning a rate reduction next month, which could help sustain the USD’s bullish trend. Market participants are currently estimating a 72% likelihood of a 25 basis points rate cut in December.
From a technical standpoint, the Relative Strength Index (RSI) on the 4-hour chart is hovering around the 50 level, which indicates a neutral market condition. GBP/USD is currently trading just above the 100-period Simple Moving Average (SMA), following a dip below this indicator earlier. Resistance levels are identified at 1.2700, 1.2750, and 1.2810, while a drop below 1.2660 could invite further selling interest, with 1.2620 emerging as the next support target.
