The British pound has started the week with gains. In the North American session, GBP/USD reached as high as 1.36075, up nearly 0.45%. However the pair moved back to 1.35 handle and is currently around 10-day average at 1.35460. Economic Calendar was silent yesterday in both US & UK markets. The pair was well bid during Asian and European market hours despite a relatively light calendar and investors took their cues yesterday from the market sentiment and the corrective move on the greenback which had a strong rally in recent weeks. The current stance over GBP remains cautious post the latest batch of poor local data and BOE’s dovish decision on monetary policy and this can be viewed as a reason for the pair’s current standstill as a broadly weak US dollar would have triggered a bullish breakout in GBP’s favor under normal circumstance.
The pair is expected to see an increase in volatility today owing to Wages and Employment Data from UK for March’18 and the Retail Sales for April’18 from US. Traders are expecting wage growth to grind higher in the UK as a disappointment in the data is expected to hit the British pound hard once again. A positive outcome in wage growth data could be viewed by many as a signal to support the case of delayed rate hikes in the UK.
The current stability is expected to be broken with the employment data release later today, but directional follow-through afterward is still unclear, as the Pound has no fundamental background to rally, while the dollar is on a downward corrective stage. Investors and Analysts are currently waiting to see how the pair fares through during intersection of American and European trading session today to see what could be the future of this pair during trading sessions to come this week. Expected support and resistance values for the pair are at 1.3500 / 1.3460 & 1.3610 / 1.3660 respectively.
This article was originally posted on FX Empire
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