GBP/USD drops below 1.31 ahead of UK data

Offered tone around GBP remained intact in Asian trade, pushing the GBP/USD pair to a low of 1.3065. The spot currently trades around 1.3090 levels.

UK employment data risks being ignored

Weakness in Pound on Tuesday and in Asian session today is despite a better-than-expected CPI figure. Moreover, markets are turning a blind eye towards data sets that represent pre Brexit period. June CPI mainly represented pre-Brexit period (before June 24).

Consequently, the wage growth number and employment figure for the month of May (pre-brexit period) is likely to be ignored, especially if it highlights improvement.

GBP/USD Technical Levels

A break above 1.3119 (June 27 low) would open doors for a re-test of 5-DMA level of 1.3192. A violation there could yield 1.3315 (23.6% of 1.5019-1.2789). On the flip side, breakdown of support at 1.3047 (July 7 high) would expose 1.30 (zero figure) which if breached would shift risk in favor of a re-test of the latest cyclical low of 1.2789 levels.