GBPUSD Plunges After UK Claimant Count Data

The Great Britain Pound (GBP) slid down against the US Dollar (USD) on Wednesday, decreasing the price of GBPUSD to less than 1.2850 following some key economic events. The technical bias has however turned bearish because of a lower low in the recent upside rally.

Technical Analysis

As of this writing, the pair is being traded near 1.2743. A support can be noted around 1.2700 (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 below chart.

On the upside, a hurdle may be noted around 1.2997 (a short-term horizontal resistance area) ahead of 1.3047 (the high of the recent upside wave) and then 1.3100 (the psychological number). The technical bias shall remain bullish as long as the 1.2700 support area is intact.

UK Labor Data

The jobless rate in the U.K. remained as expected at a 42-year low In April though wages, excluding bonuses, eased much more than expected, widening the gap between the country’s inflation rate, official data showed on Wednesday.

The Office for National Statistics said that the rate of unemployment was unchanged at 4.6% in April, in line with expectations and at its lowest level since 1975.

The claimant count increased by a seasonally adjusted 7,300 in May, compared to expectations for a gain of 20,300 people and following a rise of 22,000 a month earlier, whose figure was revised from a previously reported increase of 19,400.

Trade Idea

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

with No Comments 879