GBP/USD slipping further away from 1.2900 ahead of UK wages

• Risk-off sentiment, firmer US dollar sends Cable lower.
• May’s Plan B could keep the corrective slide cushioned.
• Markets await UK jobs and wages data for the next move.

The GBP/USD pair broke its overnight consolidative mode to the downside heading into the London markets, now looking to test the 100-DMA at 1.2854, with the immediate focus now on the UK labor market report due at 0930 GMT.

The spot continues to face stiff resistances ahead of the 1.29 handle, as the buyers remain wary over the Brexit scenario, as the March 29^th deadline approaches. Moreover, the GBP markets digest the latest report that the UK Labor Party proposes option of second Brexit referendum while a broadly firmer US dollar amid risk-off action in the Asian equities, driven by global growth risks, also collaborated to the latest leg down in the Cable.

However, the UK PM May’s Plan B announced yesterday could help keep the sentiment somewhat underpinned around the pound. PM May noted that she does not rule out a no deal Brexit while adding that the Article 50 will not be extended without a deal. Further, a stronger UK wages data could bring back BOE rate hike talks back on the table, which would send the major back above the 1.29 handle.

“The UK regular pay (excluding bonuses) is expected to rise 3.3% over the year in three months to November, confirming the strongest pay rise in a decade from the previous month. The UK total pay (including bonuses) is expected to accelerate to 3.3% y/y in three months ending in November after rising 3.3% in the previous months,” Mario Blascak, PhD, Editor-in-Chief at FXStreet noted.

GBP/USD Technical Levels