The GBP/USD currency pair is showing signs of recovery at the start of the week, bouncing back after experiencing a decline of more than 0.5% on Friday. The exchange rate has moved into positive territory, trading above the 1.2200 level. With no high-impact economic data scheduled for release, traders are closely observing remarks from Donald Trump during his inauguration ceremony, which may significantly influence market sentiment.
The US Dollar is facing notable bearish pressure in the European session, contributing to the upward movement of GBP/USD . Investor sentiment appears to have been buoyed by expectations that Trump may adopt a more measured approach to trade policy. Over the weekend, he expressed optimism about working with Chinese President Xi Jinping to address a range of issues. This anticipation may help stabilize market dynamics, albeit U.S. stock and bond markets are closed in observance of Martin Luther King Jr. Day, potentially delaying market reactions to Trump’s statements.
Looking ahead, attention will shift to the UK’s Office for National Statistics, which is set to release its jobs report on Tuesday. The report will include key data points such as the ILO Unemployment Rate, Employment Change, and wage inflation figures for November, crucial for assessing the health of the UK labor market.
From a technical perspective, the Relative Strength Index (RSI) on the 4-hour chart remains just below the neutral 50 mark, indicating a lack of strong bullish momentum. The pair is also struggling to maintain levels above the 20-period Simple Moving Average (SMA), suggesting that buyers are hesitant to commit. Immediate resistance is observed at 1.2225, the 50-period SMA, with additional resistance levels at 1.2270 and 1.2300. On the downside, support levels can be identified at 1.2160 and 1.2100, which could provide a cushion against deeper declines.
