Cable is up to session highs of 1.3045 currently
The pound is taking some heart in the slightly better-than-expected UK jobs report earlier as the employment rate rose to a record high while wages kept more steady - allowing the inflation outlook to breath a little more easy despite the recent fallout.
Cable is now challenging a break of its key hourly moving averages as buyers try to seize near-term control. If they manage to do so, the near-term bias will then turn more bullish.
That said, I wouldn't expect the earlier data to significantly keep any rally in the pound going. It is not telling us anything we don't already know before the report release.
The UK labour market remains robust with the unemployment rate near historic lows and wages continue to keep steady. The latest report only helps to reaffirm that notion.
The rates market also isn't responding too heavily to the report release with odds of a BOE rate cut next week dropping from ~67% before to ~65% at the moment.
In that lieu, I would expect any short-term gains in the pound to be faded - especially in any move above 1.3050 and towards 1.3100.
For the pound to really chase any solid gains this week, it needs confirmation from post-election PMI data on Friday. That will be the real test to seal the currency's fate ahead of the BOE policy meeting on 30 January next week.
