GBP/USD surrenders early gains, risks breaking into negative territory

   •  Investors looked past an unexpected fall in the UK unemployment rate.
   •  UK foreign secretary Jeremy Hunt’s Brexit comments prompt some selling.
   •  A modest USD uptick further contributed to the intraday retracement.

The GBP/USD pair erased a major part of early gains and now seems to have entered a consolidation phase, just above 50-hour SMA.

The pair did get a minor boost during the early European session and spiked to an intraday high level of 1.2828 after the latest UK jobs report showed that the unemployment rate unexpectedly fell to a new 43 year-low level of 4.0% in three months to June. 

The uptick was quickly sold into as additional details revealed that total annual wage growth slowed to a nine-month low of 2.4%, below forecasts for it to hold at 2.5%. 

Adding to this, a modest pickup in the US Dollar demand and comments by the UK foreign secretary Jeremy Hunt, saying that risk of a no-deal Brexit has been increasing, further collaborated towards keeping a lid on any meaningful up-move.

The retracement slide, however, seems to have found a decent support at 50-hourly SMA, near the 1.2765-60 region as market participants now start repositioning for Wednesday's important macro releases - the latest UK consumer inflation figures and the US monthly retail sales data.

Technical levels to watch

Any subsequent slide below mid-1.2700s might continue to find support near the 1.2725-20 region, which if broken might now open room for an extension of the pair's near-term depreciating slide.

On the flip side, momentum back above 1.2780 level, leading to a subsequent break through the 1.2800 handle could assist the pair to aim back towards retesting session highs resistance, near the 1.2825-30 supply zone.