GBPUSD Poised for Bullish Reversal As Buyers Gain Momentum

The Great Britain Pound (GBP) inched higher against the US Dollar (USD) on Wednesday, increasing the price of GBPUSD to more than 1.2850 following some key economic events. The technical bias remains bullish because of a higher low in the recent upside rally.

Technical Analysis

As of this writing, the pair is being traded near 1.2862. A hurdle may be noted around 1.3043 (the high of the last major upside rally) ahead of 1.3047 (another key horizontal resistance) and then 1.3100 (the psychological number).

On the downside, 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 above chart. The technical bias shall remain bullish as long as the 1.2700 support area is intact.

UK Unemployment News

The UK unemployment rate declined to the lowest since 1975, data from the Office for National Statistics showed. The ILO jobless rate came in at 4.5% in three months to May versus 4.9% in the same period of previous year. The expected rate was 4.6%. This was the lowest since 1975. The number of unemployed decreased by 64,000 from previous three months to 1.49 million. The employment rate was 74.9%, the highest since comparable records began in 1971. Including bonus, average weekly earnings for employees increased by 1.8% on a yearly basis. Excluding bonus, earnings rose 2% compared with a year earlier.

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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