GBP/USD continued its decline down to the 1.2700 level on Tuesday.
However, the decline might have be at its end, as the 1.2700 level provided strong psychological support to the currency exchange rate.
The British Pound traded sideways against the US Dollar, following the UK Employment data set release on Tuesday at 08:30 GMT. The GBP/USD exchange currency rate lost 6 pips or 0.05% right after the release. The British Pound continued trading at the 1.2945 level against the Greenback.
Office for National Statistics released the UK Average Earnings Index data, which came out worse-than-expected of 3.2% compared with forecast 3.4%. Note, that the UK Unemployment Rate was released at the same time.
The UK labour market maintains its stability with a record number of people in work. The unemployment fell to 3.8%, the lowest level since the end of 1974.
UK data starts on Wednesday
This week's notable data will begin on Wednesday. At 08:30 GMT the UK CPI will be published. This event has caused since December 2018 moves from 11.4 to 23.1 base points on the GBP/USD.Meanwhile, during the day, the UK Inflation Repot will be published. The time has not been set. Due to that reason a sudden surprise might occur and impact the GBP.
Late on Wednesday, the top event of the month will occur. The US FOMC Meeting Minutes will be released at 18:00 GMT. On the GBP/USD it has caused moves from 12.6 to 22.5 pips since October 2018.
On Friday, the UK Retail Sales data release at 08:30 GMT is expected to cause a move on the GBP/USD from 15.6 to 24.5 pips.
The week will end with the US Durable Goods Orders and Core Durable Goods Orders on Friday at 12:30 GMT. This event has been rather non-eventful in the past half a year, as it has caused moves of only nine to 20.5 pips.
GBP/USD short-term review
Yesterday, the GBP/USD exchange rate traded sideways around the 1.2740 level. During Tuesday's morning, the rate traded near the 1.2720 mark.Note, that the rate is squeezed by the monthly S2 and the 55-hour moving average, located at 1.2703 and 1.2743 respectively. If the given resistance and support hold, it is expected, that the currency pair continues to trade sideways.
However, if the given support does not hold, it is expected, that some downside potential could prevail in the market. A possible bearish target is the psychological level at the 1.2650 mark.
Hourly Chart
On the daily candle chart, the GBP/USD has broken the lower trend line of a descending channel pattern.
The rate continued the decline after the braking of the pattern.
Meanwhile, the rate has fallen fall below the daily simple moving averages, which is a clear signal that the rate has been oversold.
Daily chart
Meanwhile, trader set up pending orders in the 100-pip range were almost neutral, as 52% of orders were set to buy.