• USD profit-taking is supporting GBP/USD in the short-term.
• The UK wage’s growth on Tuesday is going to be crucial for GBP.

The GBP/USD is trading at around 1.3594 up 0.37% on Monday.

The Cable was well-bid across Asia and Europe. In the second part of the European session, the pair tested multiple times the 1.3600 handle without making any substantial break above it. 

GBP/USD is currently supported as investors are taking profits on the GBP/USD short trade which brought the pair down a little more than 900 pips in about a month. 

On a data-light Monday, GBP/USD will take its cues from the market sentiment and the corrective move on the greenback which had a strong rally in recent weeks. 

Looking ahead on Tuesday, volatility is expected on Tuesday with the UK wage’s growth data for March (Average Earnings) and the US Retail Sales for April. 

The market is expecting wage’s growth to grind higher in the UK and a disappointment in the data can hit the British pound once again.

Last Thursday, the Bank of England, made some rather dovish comments and, as expected, left its target for the overnight rate unchanged. Market participants are debating whether the next BoE rate hike will come in the summer or in the fall of this year.

GBP/USD 4-hour chart

The medium-term trend is bearish and bulls are trying to stage a reversal up. The 1.3600 handle is the main resistance to break for buyers, the next resistance is seen at the 1.3700 figure and previous swing low. To the downside, supports are seen at the 1.3540 demand level,  the 1.3500 figure and at the 1.3460 low of the year.