GBP/USD Price Analysis: Approaches 1.2400 ahead of UK Employment data

• GBP/USD is marching towards 1.2400 ahead of UK labor market data.
• March’s UK Employment data will have a significant impact on the interest rate decision by the BoE.
• A mind correction in the USD Index to 102.00 has provided some support to the cable.

The GBP/USD pair has extended its recovery above the immediate resistance of 1.2380 in the Asian session. The Cable is approaching the round-level resistance of 1.2400 ahead of the release of the United Kingdom Employment data.

Sheer volatility is expected from the Pound Sterling as the labor market data will have a significant impact on the interest rate decision by the Bank of England (BoE), which is scheduled for May. The Claimant Count Change is expected to decline by 11.8k, higher than the former release of 11.2K. The continuous addition of job seekers into the labor force indicates tight labor market conditions. Three-month Unemployment Rate is likely to remain steady at 3.7%. Average Earnings excluding bonuses are expected to soften to 6.2% from the former recording of 6.5%.

The US Dollar Index (DXY) has slipped to near 102.00, showing lackluster performance amid an absence of economic indicators this week. However, investors will keep an eye on the Federal Reserve’s (Fed) Beige Book, which provides the current economic situation of 12 Fed districts.

GBP/USD has shifted into a bearish trajectory after a breakdown of the Ascending Triangle chart pattern formed on a two-hour scale. The upward-sloping trendline of the aforementioned chart pattern is plotted from March 24 low at 1.2191 while the horizontal resistance is placed from April 04 high at 1.2525.

The 20-period Exponential Moving Average (EMA) at 1.2404 is acting as a barricade for the Pound Sterling bulls.

Meanwhile, the Relative Strength Index (RSI) (14) is oscillating in the bearish range of 20.00-40.000, indicating the downside momentum is active.

A slippage below April 10 low at 1.2345 will expose the asset to March 30 low at 1.2294 followed by March 27 low at 1.2219.

On the flip side, a recovery move above April 13 high at 1.2537 will drive the asset towards a fresh 10-month high at 1.2597, which is 08 June 2022 high. A breach of the latter will expose the asset to May 27 high at 1.2667.

GBP/USD two-hour chart