The Great Britain Pound (GBP) extended downside movement against the US Dollar (USD) on Friday, dragging the price of GBPUSD to less than 1.4420 following the release of some key economic news from the United States. The technical bias has already turned bearish because of a Lower High in the recent upside rally.
Technical Analysis
As of this writing, the pair is being traded near 1.4405. A support may be noted around 1.4340, the swing low of the last major downside move ahead of 1.4077, a major horizontal support area on the daily chart. The technical bias will remain bearish as long as the 1.4739 resistance area is intact.
On the upside, the pair is likely to face a hurdle near 1.4500, the confluence of psychological number as well as horizontal support as demonstrated in the above daily chart. A break above 1.4500 would threaten 1.4739, the swing high of the recent upside rally.
US Employment
Private sector employment increased by 173,000 jobs from April to May according to the May ADP National Employment Report. Broadly distributed to the public each month, free of charge, the ADP National Employment Report is produced by ADP in collaboration with Moody’s Analytics. The report, which is derived from ADP’s actual payroll data, measures the change in total nonfarm private employment each month on a seasonally-adjusted basis.
Elsewhere Initial U.S. jobless claims fell slightly in late May to the lowest level in five weeks, showing virtually no change in the low rate of layoffs taking place across the economy. New claims in the period running from May 22 to May 28 dropped by 1,000 to a seasonally adjusted 267,000, the Labor Department said Thursday.
Trade Idea
Considering the overall technical and fundamental outlook, selling the pair on short-term rallies appears to be a good strategy in near term.
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