Pound is trading in the positive node on Tuesday but struggles near 1.3420 level. The pound seem to trade higher against greenback although post-Brexit trade arrangements for Northern Ireland remain a risk which could drag the pound down.

Relations between the UK and EU have been tattered due to the British threats to trigger Article 16 an emergency plan of the Northern Ireland Protocol.

European Commission’s Maros Sefcovic said “The EU will consider all tools at its disposal if the UK Government triggers Article 16. If the British Government suspends the Northern Ireland Protocol, it will have serious consequences for the region and Brussels’ relationship with the UK.”

On the positive side, He said that, “Last Friday, I held my fourth weekly meeting with David Frost on the EU package of solutions”. He also acknowledged and welcomed the change in tone of this discussion compared to previous ones. 

Elsewhere After a small break in the Covid cases, the UK has again started witnessing the rise in new cases which would push the regulators to announce the extension of booster shots for people over the age of 40. If the cases continue to rise, it might lead to another lockdown.

Meanwhile, Bank of England Governor Andrew Bailey, speaking before the UK Parliament Treasury Select Committee TSC, said that all future BoE policy meetings are now “in play” for a rate rise. He added that, given the very high uncertainty in economy, it would be hazardous to give specific forward guidance about when exactly these hikes might come.

Traders will be keen to watch the UK jobs and Earnings data, US Retail Sales figure and the Fedspeak scheduled later in the day which will play a key role in directing the pair further.

GBP/USD 4 Hour Chart:

Support: 1.3392 (S1), 1.3374 (S2), 1.3345 (S3).

Resistance: 1.3438 (R1), 1.3467 (R2), 1.3485 (R3).

The Pound seems trade on positive node but seem to struggle and started consolidating ahead of UK jobs data, we expect a mixed trend for GBP/USD.