FXOpen
UK labour market data was released today.
According to Dow Jones Newswires:
→ Employment growth exceeded expectations, and unemployment benefit claims came in lower than forecast. ING analysts believe this supports the view that the Bank of England will cut interest rates more cautiously compared to the Federal Reserve.
→ Capital Economics analysts also suggest that the Bank of England is unlikely to lower rates for a second consecutive month at next week’s policy meeting.
The initial reaction to the positive UK labour market news was a bullish impulse for the pound, with GBP/USD rising from around 1.3080 to break above 1.3100 shortly after the release.
However, the pair then retraced towards its “initial levels,” indicating that bulls are struggling to capitalise on the strong data. This could also signal the dominance of bears.
Technical analysis of GBP/USD today points to further bearish signals:
→ The price failed to stay above the previous high around 1.314.
→ A bearish engulfing pattern at the market’s peak (as shown by the first red arrow).
→ A long upper wick on the 6 September candlestick (as indicated by the second red arrow).
Bulls may find support (shown by the blue arrow) from the median of the linear regression channel (in blue). But is this enough to prevent GBP/USD from continuing the downward trend seen since late August and falling towards the channel’s lower boundary?
Much will depend on tomorrow's US inflation data. The Consumer Price Index (CPI) figures will be released at 15:30 GMT+3.
Trade over 50 forex markets 24 hours a day with FXOpen. Take advantage of low commissions, deep liquidity, and spreads from 0.0 pips. Open your FXOpen account now or learn more about trading forex with FXOpen.
This article represents the opinion of the Companies operating under the FXOpen brand only. It is not to be construed as an offer, solicitation, or recommendation with respect to products and services provided by the Companies operating under the FXOpen brand, nor is it to be considered financial advice.
Stay ahead of the market!
Subscribe now to our mailing list and receive the latest market news and insights delivered directly to your inbox.
Latest articles
XBR/USD Chart Analysis: Price Rebounds from a Seven-Week Low
On 1 December, we outlined a descending channel on the XBR/USD chart and noted that the bearish trend was driven by fading geopolitical risks. Indeed, hopes for an end to the war in Ukraine—along with the possibility of
Silver Price Hits Historic Record Around $64
On 27 November, we suggested that silver was preparing to challenge its all-time high. Since then (marked with the orange arrow), XAG/USD has risen by roughly 18%, breaking above the psychological $60-per-ounce threshold for the first time in history.