The pound shows weak dynamics, consolidating around the 1.2800 level. Yesterday, the pair updated local highs from June 12, but by the end of the day, the bulls had lost most of their positions. Support for the British currency, caused by the results of the parliamentary elections, where the Labour Party won for the first time in 14 years, is weakening
The growth of the GBP/USD pair is supported by the weakness of the US dollar. The pressure on the US currency was exerted by Friday's labor market report: the number of new jobs outside the agricultural sector in June decreased from 218 thousand (revised from 272 thousand) to 206 thousand, which turned out to be better than the projected 190 thousand. But! The average hourly wage slowed down from 4.1% to 3.9% in annual terms and from 0.4% to 0.3% on a monthly basis, which should help reduce inflation risks. The unemployment rate rose from 4.0% to 4.1%, contrary to analysts' expectations. Weak labor market data may increase pressure on the US Federal Reserve to lower interest rates, but markets still expect one or two cuts before the end of the year, the first of which is likely to take place no earlier than September.
On Thursday, British investors will pay attention to GDP data for May, where economic growth is projected from 0.0% to 0.2%, and industrial production may increase by 0.6% in annual terms.
New Prime Minister Keir Starmer, during a visit to Scotland, announced plans for the Labour Party to establish closer ties with the EU to review trade rules established under Boris Johnson in 2020. However, the analytical center "Great Britain in a Changing Europe" believes that these plans will have a minimal impact on reducing government spending, which increased after the UK left the EU. According to experts, 78% of Labour voters would support the country's return to the EU.
Technical analysis of GBP/USD for today
On the daily chart, the Bollinger bands indicator indicates active growth. MACD retains a confident buy signal, and Stochastic, having tested the area of maximum values, turns down.
Short positions can be opened after a confident breakdown down to the level of 1.2776 with a target of 1.2700. We place the stop loss at 1.2817.
A rebound from the level of 1.2776 followed by an upward breakdown of the resistance of 1.2817 becomes a signal to buy with a target of 1.2900. In this case, we will set the stop loss to 1.2776.