GBP/USD sticks to modest gains near 1.3535 area, moves little post-UK jobs report

• GBP/USD regained positive traction on Tuesday and reversed a major part of the overnight losses.
• The uptick lacked bullish conviction and seemed rather unaffected by mostly in-line UK jobs data.
• Hawkish Fed expectations, geopolitical tensions underpinned the safe-haven USD and capped gains.

The GBP/USD pair held on to its modest intraday gains around the 1.3535 region and had a rather muted reaction to the UK employment details.

Having shown some resilience below the key 1.3500 psychological mark, the GBP/USD pair attracted some buying on Tuesday and reversed a major part of the overnight losses to a one-week low. The uptick, however, lacked bullish conviction and also seemed rather unaffected by mixed UK jobs report.

According to the data released by the UK Office for National Statistics this Tuesday, the number of people claiming unemployment-related benefits fell by 31.9K in January as against 43.3K previous. Adding to this, the ILO Unemployment rate held steady at 4.1% during the three months ending December.

Additional details revealed that Average Earnings decelerated further in December, though were slightly better than market expectations. This, however, did little to provide any meaningful impetus to the British pound or assist the GBP/USD pair to capitalize on its modest intraday uptick.

Worries over an imminent Russian invasion of Ukraine continued weighing on investors' sentiment. This, along with the prospects for a faster policy tightening by the Fed, acted as a tailwind for the safe-haven US dollar and kept a lid on any further gains for the GBP/USD pair, at least for now.

Market participants now look forward to the release of the US Producer Price Index (PPI) for January, due later during the North American session. Apart from this, the focus will be on geopolitical developments, which might influence the USD and produce trading opportunities around the GBP/USD pair.

Technical levels to watch