GBP/USD dropped for the third day in a row on Tuesday, hitting its lowest point since November 17 during the Asian session. The spot price is now hovering around 1.2420 as traders await the upcoming UK monthly employment report for fresh clues.
Market consensus predicts a rise in the number of unemployment benefit claims to 17.2 thousand from the previous 16.8 thousand, and the unemployment rate is expected to increase from 3.9% to 4% for the three months ending in March. These indicators suggest a cooling job market, reinforcing expectations of at least four Bank of England (BoE) rate cuts starting in June, which could weaken the British Pound further and push GBP/USD lower.
The resistance zone seems solid, as the price has bounced off it multiple times in the past before the breakout occurred. The resistance zone aligning with the moving averages is a good sign of bearish momentum. I suspect the price might be below the Ichimoku cloud, which is also an indication of bearish momentum. Let's see how this plays out.