GBP/USD – Pound in Holding Pattern Ahead of Job ReportsThe pound is subdued on Tuesday, but that could change later in the day, as investors brace for soft employment numbers out of the U.K. (releases at 9:30 GMT).
GBP/USD is steady in Tuesday trade. Currently, the pair is trading at 1.3007, up 0.02% on the day.
Will Job Numbers Shake Up Sleepy Cable?
British indicators were soft last week as declines in the monthly GDP report and retail sales underscored weakness in the economy. Despite the disappointing data, the pound managed to escape with minimal losses last week.
Investors will now shift their focus to the labor market, with key releases later on Tuesday. Wage growth has slipped in the second half of 2019 and fell to 3.2% in October. This was sharply lower than the 3.6% gain in September. The downward trend is expected to continue in November, with an estimate of 3.1%. Jobless claims fell to 28.8 thousand in November, much higher than the forecast of 21.2 thousand. Analysts are braced for a weak release in December, with an estimate of 33.4 thousand. If these forecasts are accurate, it could dampen investor sentiment towards the pound and send the currency to lower ground.
With GBP/USD unchanged on Tuesday, our technical outlook remains intact. The pair is flirting with the 1.30 line, which has psychological significance. The 50-EMA line remains at 1.3000. Below, 1.2950 is providing support. On the upside, 1.3050 is the next resistance line.
Pacific Currencies – Daily Summary
After hitting an 8-month low on Monday, the Chinese yuan has reversed directions this week. Currently, USD/CNY is trading at 6.8988, up 0.47% on the day. After an excellent run, the yuan is ripe for further profit-taking, so we could see more gains for the pair.
AUD/USD is on a downward trend, as the pair puts pressure on support at the 0.6800 line. The pair is trading at 0.6857, down 0.27% on the day. In economic news, Australia releases Westpac Consumer Sentiment later on Tuesday. Consumer confidence remains weak – the indicator fell by 1.9% in December, its third decline in four months. Will we see a rebound in the January release?
With no New Zealand indicators until Wednesday, it has been a slow start to the week for NZD/USD. The pair continues to test support at the round number of 0.6600. Currently, the pair is trading at 0.6596, down 0.16% on the day.