Market Analysis

The GBP/USD pair continued its downward trend for the third consecutive day, marking its fourth negative move in the last five days, reaching its lowest level since November 17 during the Asian trading session. 

Currently trading around the 1.2420 region, traders are eagerly awaiting the release of UK monthly employment data for potential market direction.

Consensus estimates suggest that the number of people claiming unemployment-related benefits is expected to increase to 17.2K from the previous 16.8K, with the jobless rate forecasted to edge higher from 3.9% to 4% for the three months ending in March. 

Such figures could reinforce the perception of a cooling job market and strengthen expectations for at least four rate cuts by the Bank of England (BoE) this year, commencing in June. This anticipation is likely to exert downward pressure on the British Pound (GBP), consequently dragging the GBP/USD pair lower.

However, any unexpected strength in the report may have limited immediate impact due to the prevailing bullish sentiment surrounding the US Dollar (USD), supported by optimistic Federal Reserve (Fed) outlooks. 

Following the release of US consumer inflation figures surpassing expectations, investors have postponed their projections for the first Fed interest rate cut from June to September, sustaining elevated US Treasury bond yields and bolstering the USD.

Furthermore, ongoing geopolitical tensions in the Middle East have bolstered the USD's status as a safe-haven currency, adding to the downward pressure on the GBP/USD pair. As a result, any attempts at recovery are likely to be viewed as selling opportunities. 

Traders will also closely monitor US macroeconomic data and speeches by FOMC members, including Fed Chair Jerome Powell, for further market cues on Tuesday.

Paraphrasing text from "FX Street" all rights reserved by the original author.