GBP/USD to test the July 14 low near 1.1760 on a dip below 1.1965 – BBH

The GBP/USD pair manages to defend the 1.2000 psychological mark on Tuesday. A drop under 1.1965 would set up a test of the July 14 low near 1.1760, according to economists at BBH.

UK reported labor market data

“Break below 1.1965 would set up a test of the July 14 low near 1.1760.”

“Employment rose 160K in the three months through June vs. 268K expected, while the unemployment rate remained steady at 3.8%.”

“Real wages fell by 3% during the same period, the most since the series began in 2001, as rising inflation and slowing nominal wage gains are clearly hurting household income. Expect consumption to continue weakening in the coming months.”

“Of note, job vacancies for the three months through July fell 19.8K, the first drop since August 2020 and possibly signaling weaker labor market conditions ahead.”