• GBP/USD strengthened on Tuesday as higher than expected UK headline pay growth data supported pound.
• British pay growth picked up in late 2024, reinforcing the Bank of England's cautious stance on rate cuts despite a weak economy.
• Private-sector pay excluding bonuses, the BoE's key inflation gauge, rose 6.2% in late 2024, the fastest pace in a year, up from 5.9% in November, according to the Office for National Statistics.
• The ONS reported that pay across the entire economy, excluding bonuses, rose 5.9% in the three months to December, the strongest growth since April of the previous year.
• Immediate resistance is located at 1.2633(38.2%fib), any close above will push the pair towards 1.2752(23.6%fib).
• Support is seen at 1.2543(50%fib) and break below could take the pair towards 1.2476(Jan 7th low).
Recommendation: Good to buy around 1.2580 with stop loss of 1.2500 and target price of 1.2650
