Cable Remains Solid After UK Claimant Count Change News

The Great Britain Pound (GBP) inched higher against the US Dollar (USD) on Wednesday, increasing the price of GBPUSD to more than 1.3150 following some key economic events. The technical bias remains bullish because of a higher low in the recent downside move.

GBP/USD Technical Analysis

As of this writing, the pair is being traded near 1.3172. A hurdle may be noted around 1.3655 (a major horizontal resistance zone) ahead of 1.3900(a psychological level) and then 1.3943 (another major resistance area).

On the downside, a support can be noted around 1.3000 (a psychological number) ahead of 1.2634 (the low of the last major downside move) and then 1.2500 (the confluence of horizontal support as well as psychological number) as demonstrated in the given above chart. The technical bias shall remain bullish as long as the 1.2700 support area is intact.

UK Claimant Count Change

The most recent employment data out the UK has exceeded forecasts with the average earnings index 3m/y coming in at 2.2% vs 2.1% expected whilst the claimant count change fell to +1.1k against consensus calls for a +2.0k print. The unemployment rate remains flat at a 42-year low of 4.3%. The pick-up in wage growth, which also included a slight upwards revision to the prior reading, will be seen as a positive for workers, but the pace of the growth remains well below current inflation meaning that in real terms workers are still substantially worse off.

Trade Idea

Considering the overall technical and fundamental outlook, buying the pair around current levels may be a good strategy in short to medium term.

 

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Usman Ahmed

Usman Ahmed is an individual forex trader and market analyst. He holds a Masters of Business Administration (MBA) degree. His work includes fundamental and technical reports on various currency pairs, commodity futures and stock markets. His technical analysis features price action strategies.

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