Forex - GBP/USD edges lower in cautious trade

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Investing.com - The pound edged lower against the U.S. dollar on Monday, as market participants remained cautious ahead of a highly anticipated testimony by Federal Reserve Chairman Janet Yellen on Tuesday.

GBP/USD hit 1.6383 during U.S. morning trade, the session low; the pair subsequently consolidated at 1.6392, slipping 0.12%.

Cable was likely to find support at 1.6303, the low of February 7 and resistance at 1.6486, the high of January 21.

Sentiment on the dollar remained vulnerabke after the Labor Department on Friday said the U.S. economy added 113,000 jobs in January, well below expectations for 185,000 new jobs, as inclement weather contributed to the slowdown in hiring.

The report also showed that the number of people participating in the labor force edged up to 63% from a 30-year low of 62.8% last month, while the unemployment rate unexpectedly ticked down to a five year low 6.6% from 6.7% in December.

However, the report was seen as unlikely to prompt the Fed to halt reductions in its stimulus program. The bank announced a second cut to its asset purchase program in January, trimming it to $65 billion-per-month.

Sterling was lower against the euro, with EUR/GBP edging up 0.11% to 0.8317.

Also Monday, data showed that French industrial production fell 0.3% in December, compared to expectations for a 0.1% uptick. Industrial production in November was revised down to a 1.2% increase from a previously estimated 1.3% rise.

Trading volumes were expected to remain light, with no U.S. economic reports to be released throughout the session.

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This article appears in: Investing , Forex and Currencies

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