Sterling traders are gearing up for another busy trading day, with UK employment numbers due out early in the London session. The Bank of England cut interest rates last week but is not expected to make another move this year unless data changes dramatically. Inflation remains a concern for the Monetary Policy Committee (MPC), especially after the recent government budget, but employment data also carries significant weight in the Bank’s considerations. A substantial deviation in either direction could sharply alter market expectations and trigger major moves for the pound.
Cable is now positioned at an intriguing level as we approach this key data release, sitting near critical support levels on the daily chart. Both the long-term trendline support and the 200-day moving average are close to current market levels, and any figure significantly higher than the anticipated 30.5k increase in the Claimant Count or the expected 4.1% unemployment rate could push it lower into a fresh downside range. Conversely, a stronger-than-expected showing for the job market would offer Cable bulls—who have been in short supply recently—an opportunity to use these levels as support for long positions. Overall, however, given recent movements in the dollar, most of the market will likely be looking for opportunities to sell Cable, so a weaker-than-expected result in the data may have a more significant impact.
Resistance Levels
Resistance 2: 1.3386 – Trendline Resistance
Resistance 1: 1.3047 – November High
Support Levels
Support 1: 1.2848 – Trendline Support
Support 2: 1.2817 – 200-Day Moving Average
