Track GBP/USD under pressure as UK wage growth slows. Stay informed on currency markets with real-time updates on GBP/USD dynamics.
The British Pound (GBP) faced downward pressure against the US Dollar (USD) today as the latest employment data from the Office for National Statistics (ONS) revealed a slowdown in UK wage growth for November. The unemployment rate, however, remained unchanged, providing a mixed picture of the labor market.
Despite the deceleration in wage growth, analysts suggest that the figures still hover above a level that would prompt the Bank of England (BoE) to consider an immediate interest rate cut. The central bank has been closely monitoring economic indicators amid the ongoing challenges posed by the global economic landscape.
Market analysts note that the US dollar has strengthened after an extended weekend. The US Dollar Index is currently at a 10-day high, benefitting from slightly increased US Treasury bond yields and persistent geopolitical concerns in Ukraine and the Red Sea region.
GBP/USD Under Pressure as UK Wage Growth Slows
As a result of the USD’s resurgence, the GBP/USD currency pair is now testing a crucial support level of around 1.2667. Should this level be breached, traders anticipate further downside momentum, with key levels such as the 38.2% Fibonacci level at 1.2628, a consolidation zone around 1.2610/15, and the 50-day simple moving average at 1.2608 coming into play. Expect resistance around 1.2742 on the upside, with additional barriers near recent highs up to just under 1.2800.
Retail trader data for GBP/USD indicates that 49.18% of traders are currently net-long, with the ratio of short to long positions at 1.03 to 1. The number of traders holding long positions has increased by 20.81% compared to yesterday and 13.71% higher than last week. Conversely, the number of traders with short positions has decreased by 6.02% since yesterday and 12.71% lower than last week.
Regarding sentiment, a bearish outlook prevails among clients, with 51% being net long. Daily changes in longs, shorts, and open interest (OI) indicate a 15% increase in long positions, a 7% decrease in shorts, and a 3% increase in OI. Weekly figures show a 12% increase in longs, a 15% decrease in shorts, and a 3% decrease in OI.
Market participants closely monitor these developments as the GBP/USD pair navigates through current market dynamics, balancing employment data, currency strength, and global geopolitical uncertainties.