GBP/USD holds steady ahead of UK jobs and inflation data

The GBP/USD pair is in a tight range ahead of a relatively busy week for the markets. The pair is trading at 1.3250, where it has been in the past few days.

UK jobs ahead

The British pound will be in the spotlight this week as investors focus on key economic numbers from the UK and the Bank of England (BOE) decision. On Friday, the UK published weak GDP, manufacturing, and industrial production data.

On Tuesday, the Office of National Statistics (ONS) will publish the latest UK jobs numbers. Economists expect the data to show that the UK unemployment rate declined to 4.2% in October as the country’s recovery accelerates. At the same time, they expect that the country’s claimant count continued to decline. 

The next major catalyst for the GBP/USD pair will be the upcoming UK inflation numbers that will be published on Wednesday. Economists expect that the data will show that the country’s headline consumer price index (CPI) rose from 4.2% in October to 4.7% in November. This will be the highest level in a few decades. 

On Friday, data from the US showed that the country’s inflation rose to the highest level in more than 4 decades as the supply chain disruptions continued.

The GBP/USD will also react to the latest Bank of England (BOE) decision that is scheduled for Thursday. Before the new Omicron variant was announced, most analysts were expecting that the bank will start winding down its QE program this month. Now, analysts believe that the bank will be a bit patient.

Elsewhere, the pair will also react to key data from the United States. On Tuesday, the country will publish the latest producer price index (PPI) data. They will be followed by the FOMC decision on Wednesday.

GBP/USD forecast

The three-hour chart shows that the GBP/USD pair declined to a multi-month low of 1.3163 last week. It then bounced back and is now trading at 1.3257. This price is a few pips above the 25-day and 50-day moving averages (MA). The MACD has also risen above the neutral level. It is also slightly below the 23.6% Fibonacci retracement level. Therefore, the pair will likely keep rising as bulls target the 23.6% retracement level at 1.3325.