GBP/USD retreats further, refreshes session low near mid-1.3200s

The GBP/USD pair extended the post UK jobs data retracement from one-year highs and has now dropped to fresh session lows, near mid-1.3200s.

The latest UK employment report showed that wage growth remained sluggish and continue to lag behind a rising inflation trajectory, which was now seen discouraging the Bank of England (BoE) to raise interest rates anytime soon.

The pair has now retreated over 75-pips from 1.3330 area, the highest level since Sept. 2016 touched during early European session, and eroded part of previous session's strong gains led by accelerating headline CPI. 

Meanwhile, a subdued US Dollar price action did little to lend any support, albeit seems to have slowed the pace of decline for the time being. 

Next in focus would be the US PPI print, which might provide some short-term trading opportunities ahead of the very important BoE monetary policy decision on Thursday.

   •  GBP/USD now eyes 1.3443/6 – Commerzbank

Technical levels to watch

Valeria Bednarik, Chief Analyst at FXStreet writes: "The pair fell into negative territory, down to the current 1.3270 price zone, and looking poised to extend its decline, at least towards the 1.3220 region, where in the 4 hours chart, the pair has the 23.6% retracement of its latest bullish run, and a strongly bullish 20 SMA. Technical indicators in the mentioned time frame begun correcting extreme overbought conditions, further supporting a downward move ahead. A break below the mentioned Fibonacci level should expose 1.3165, the 38.2% retracement of the same rally."

"A recovery seems unlikely, but if the pair manages to re-take the 1.3300 level, the rally can extend up to the 1.3345, a relevant weekly high from September 2016" she added.