GBP/USD Holds Steady Above 1.2500 - What's Next for the Currency Pair? | UK Labor Data in Focus

The Super Trump memeBritish Pound continues to demonstrate strength against the US Dollar, maintaining its position above the psychologically important 1.2500 level. Market participants are closely monitoring the currency pair's movements as several fundamental factors come into play.

Recent economic data from the United Kingdom has painted a mixed picture. On one hand, the nation's GDP growth surprised to the upside, showing 0.6% expansion in Q1 2024 - the strongest quarterly performance in over two years. This positive development helped the Pound recover from earlier weakness caused by dovish comments from Bank of England officials.

Bank of England Chief Economist Huw Pill recently indicated that policymakers might be considering rate cuts in the near future. These remarks initially weighed on Sterling, but the currency quickly found support from improving risk sentiment in global markets. The USD Index (DXY) has faced headwinds following disappointing US consumer sentiment data, which dropped to six-month lows.

Technical analysts note that GBP/USD currently trades between key moving averages, with immediate resistance near 1.2550 and support around 1.2480. The 200-day moving average at 1.2543 could serve as an important pivot point for future price action.

All eyes now turn to Tuesday's UK labor market report, which could provide fresh direction for the currency pair. Market consensus expects:

Claimant Count Change to show increased jobless claims
ILO Unemployment Rate to edge higher
Average Earnings growth to moderate slightly

Meanwhile, US economic calendar highlights this week include CPI inflation data and retail sales figures. These releases could influence Fed policy expectations and consequently impact USD valuation. The recent uptick in US inflation expectations has helped limit Dollar losses despite weak sentiment data.

From a technical perspective, traders are watching several key levels:

Support Levels	Resistance Levels
1.2480 (Daily SMA20)	1.2541 (Previous Daily High)
1.2446 (Weekly Low)	1.2594 (Weekly High)
1.2400 (Psychological)	1.2709 (Monthly High)

The currency market's reaction to upcoming data releases will likely determine whether GBP/USD can sustain its current bullish momentum or face renewed pressure. With central bank policy divergence remaining a key theme, traders should prepare for potential volatility around major economic announcements.