Look for more downside in cable
TD Research notes that the focus for GBP traders turns to the pulse of domestic data on Wednesday.
"The employment report will capture most of the attention this week since the data calendar in Europe looks sparse. We suspect the market will be closely watching the labor data and the wage numbers.
Most important, we look for the wage growth data to slip again in May, which does not bode well for consumption moving forward...This backdrop comes against a broader series of data disappointments, leaving GBP vulnerable to another round of weak data," TD argues.
On the technical front, TD notes that GBP/USD downside break of the 50dma around 1.2875 opens up a test of 1.27.
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