GBP/USD fails to extend UK jobs-led recovery move beyond 1.29 handle

The GBP/USD pair trimmed part of UK jobs data-led recovery gains and retreated around 25-30 pips from session tops near the 1.2900 handle. 

Earlier today, the pair managed to rebound sharply from over one-month lows following a surprisingly stronger UK employment details, showing that the UK unemployment rate fell to its lowest level in more than 40 years in June and average earnings recorded a slightly better-than-expected growth of 2.1% during the three months through June. 

   •  UK: Healthier jobs report as wage growth beats expectations - ING

The up-move, however, lacked any strong follow through momentum amid fading prospects of an early BoE rate hike action. This coupled with a modest pickup in the US Dollar demand, backed by yesterday's stronger US economic data, further collaborated towards capping any immediate sharp recovery for the major.

Moreover, investors also seemed reluctant to place aggressive bets ahead of the FOMC meeting minutes, with the pair moving back to Asian session consolidative range. Heading into today's key event risk, the US housing market data - housing starts and building permits would be looked upon to grab some short-term trading opportunities.

Technical outlook

Valeria Bednarik, Chief Analyst at FXStreet writes, "the 4 hours chart shows that the pair is now struggling to regain the 1.2900 mark, with the ongoing recovery being corrective, as technical indicators are barely bouncing from oversold levels, whilst the price keeps developing well below a bearish 20 SMA. The pair has an immediate static resistance in the 1.2910/20 region, with a break above it favoring a recovery towards 1.2950/60, where selling interest will likely contain advances. 1.2870 is the immediate support, with a break below favoring a retest of the daily low, en route to the 1.2800 figure."