GBP/USD: UK housing price, employment clues prod Pound Sterling bulls above 1.2700, focus on Jackson Hole
- GBP/USD remains sidelined after snapping four-week downtrend.
- UK Rightmove House Price Index, employment survey from Adjuna prods Cable buyers.
- Hawkish BoE concerns allowed Pound Sterling to ignore upbeat Greenback.
- Monthly PMIs, central bankers’ speeches at Jackson Hole eyed for clear directions as UK recession woes challenge pair buyers.
GBP/USD buyers struggle to keep the reins after beating the bears the last week, following four consecutive weekly declines. With this, the Cable pair seesaws near 1.2740-30 amid the early hours of Monday’s Asian session after positing the first weekly gain in five. That said, the latest round of the UK housing and employment signals seem to join the market’s cautious mood ahead of this week’s top-tier data/events to prod the Pound Sterling buyers.
As per the latest survey of the UK’s job search website Adjuna, vacancies and advertised starting salaries marked their first fall of 2023 in July. That said, Adjuna co-founder Andrew Hunter mentioned, per Reuters, “Whilst it's natural to see vacancies fall during the summer months, as companies traditionally slow hiring, the early figures for July's jobs data will demonstrate to UK policymakers that inflation truly should be on a downward trajectory.”
Additionally, the Rightmove House Price Index for August marked a sharp fall in the UK’s asking price for homes, down to -1.9% MoM from -0.2% prior. Details of the survey, shared by Reuters, cite the rising mortgage costs as the key catalysts for the slump in the prices.
During the last week, UK Retail Sales dropped for July but the wage growth and details for inflation numbers improved for the said month, which in turn fuelled the hawkish expectations from the Bank of England (BoE), which in turn seems to have fuelled the Pound Sterling after the data release.
It’s worth noting that the upbeat US second-tier manufacturing activity numbers, Retail Sales and wage growth allowed the US Dollar to remain firmer for the fifth consecutive week, especially backed by the hawkish Fed Minutes. Also keeping the Greenback firmer was the China-inflicted risk-off mood and the upbeat Treasury bond yields. With this, US Dollar Index (DXY) grew in the last five consecutive weeks, to 103.40 at the latest.
Against this backdrop, Wall Street closed mixed on Friday whereas the US Treasury bond yields retreat after a strongly negative week for the equities and the upbeat bound coupons. That said, the S&P500 Futures remain lackluster at the monthly low by the press time.
Looking ahead, a light calendar on Monday could join the recently downbeat UK catalysts to prod the GBP/USD buyers. However, major attention will be given to Wednesday’s preliminary readings of the August month Purchasing Managers Indexes (PMIs) and the central bankers’ speeches at the annual Jackson Hole Symposium event, scheduled between August 24 and 26.
Technical analysis
Despite the previous week’s recovery from the 100-DMA support, around 1.2630 by the press time, the GBP/USD pair remains well beneath the 50-DMA hurdle surrounding the 1.2800 round figure, which in turn joins the bearish MACD signals to keep the Cable bears hopeful.