The sterling struggles despite improved unemployment data, the employment data showed that the unemployment rate unexpectedly dropped to 5% in January. The estimates were pointing to a modest uptick to 5.2% from 5.1%. The positive reading, to a larger extent, was offset by a Jump in the number of people claiming unemployment-related benefits to 86.6K as against the 20.8K decline recorded in the previous month.

But the Employment change 3 – months came with a negative data of -148k against the expectation of -41k also high then the previous record of -114k which creates downward pressure on the pound.

Elsewhere, Investors turned cautious after the US, Canada, UK and EU – in a rare, coordinated move – imposed sanctions on Chinese officials over human rights violations in Xinjiang.

On the other hand, the British pound remained depressed based on the overnight reports that the European Union is set to block exports of Oxford-AstraZeneca vaccines to the UK. A significant shortage in vaccine supplies could hamper the UK government’s plan to exit the current lockdown and dampen prospects for a swift economic recovery.

The dollar’s attraction was boosted as U.S. Federal Reserve officials appeared to tolerate recent rises in yields – turning the focus now to Congressional testimony by Fed Chair Jerome Powell and Treasury Secretary Janet Yellen later by today.

US Existing homesales monthly data declined by 6.8% showing -6.6% against the forecast of 2.3% whereas Existing home sales dropped to 6.22M which is less than the forecast of 7.24M. This data puts pressure on the greenback.

GBP/USD 4 Hour Chart:

Support: 1.3826 (S1), 1.3792 (S2), 1.3767 (S3).

Resistance: 1.3885 (R1), 1.3910 (R2), 1.3944 (R3).

Traders now look forward to scheduled speeches by the BoE Governor Andrew Bailey and Deputy Governor Jon Cunliffe, which might influence the pound. Amidst all the catalyst creating more pressure on pound then greenback, we expect a bearish trend for GBP/USD.