GBP/USD recovery halted around 1.12760, jobs data eyed

The Sterling is down smalls vs. the greenback on Wednesday, prompting GBP/USD to return to the 1.2745/40 band  ahead of the opening bell in Euroland.

GBP/USD attention to UK data, FOMC

After a negative start of the week, Cable managed to get some traction on Tuesday and rebounded over a cent from the support region in the 1.2630 area to as high as the vicinity of 1.2760, where it seems to have lost some upside momentum. Higher-than-expected UK inflation figures during May were the main catalyst of the abrupt up move along with the continuation of the selling bias around the buck.

Cautiousness ahead of key UK jobs report and the FOMC meeting later in the NA session are driving the broad-based sentiment around GBP today, while concerns over the UK political scenario and its consequences on Brexit negotiations stay a key driver in the longer run.

In today’s data space, UK’s jobless rate is seen at 4.6% while Claimant Count Change is expected to have risen by 10.0K during last month.

Across the pond, US retail sales and inflation figures will be in the limelight ahead of the key FOMC meeting. Recall that a 25 bp rate hike today is almost fully priced in, while attention should shift to the probable timing of the reduction of the Fed’s balance sheet and the likeliness (or not) of a third raise in the next months.

GBP/USD levels to consider

As of writing the pair is losing 0.07% at 1.2744 and a breakdown of 1.2632 (low Jun.9) would open the door to 1.2625 (100-day sma) and finally 1.2569 (200-day sma). On the upside, the next hurdle lines up at 1.2771 (high Jun.12) followed by 1.2791 (55-day sma) and then 1.2882 (20-day sma).