Cable price action is caught in between the key hourly moving averages
As such, the near-term bias is now more neutral as price rests under the 100-hour MA (red line) @ 1.3012 and above the 200-hour MA (blue line) @ 1.2970.
The focus for the pound today will be the UK labour market report release but barring any major surprises, the data today should see minimal impact on the currency.
And even if there is a decent nudge higher in the pound on a positive surprise from wages of employment conditions, expect that to be short-lived ahead of the more pivotal releases i.e. inflation, retail sales and PMI data this week.
Expectation today is for wage pressures to ease slightly from previously robust levels but the unemployment rate should continue to reaffirm that the UK labour market remains tight, so overall there shouldn't be much for traders to really work with.
For any topside reaction, look towards the trendline resistance at 1.3045 as well the region around 1.3050-70 to limit gains for now. Meanwhile, any downside pressure needs to break the 200-hour MA @ 1.2970 for sellers to chase a further move.
I would argue that the pound will trade in a manner whereby the UK data deluge this week needs to be taken as a whole rather than basing off individual releases.
However, a significant miss on inflation tomorrow - which is expected to recover a little - will be a real cause of concern for the BOE as they risk falling into the low inflation trap. I reckon such a scenario may outweigh the collective data during the week - if we do see it happen.
Otherwise, look towards the technical reaction to the data releases and if we will see a test or break of any of the key near-term levels above to chase after the next move.
