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UK Jobs Data Helps Pound to Recover Further

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Sterling recovered some ground against the dollar on early Wednesday, pushing back above the psychological level of 1.5400 after both the UK Claimant Count Change and the Unemployment Rate fell by -38.6K vs -25.0K expected and 5.7% vs 5.8% expected, respectively. Note that the Unemployment Rate is at the lower level since 2009 and below 6% since October 2014.

The GBPUSD pair surged immediately after the data released as it managed to maintain its positive positions above the key support level of 1.5315, which coincides the 50-period SMA on the 4-hour timeframe. Furthermore, the 4- hour chart below shows that the pair has been trading in an upward manner, with higher highs and higher lows established. Moreover, the pair is trading above the descending trend line which started back in July 2014.

Currently the pair is moving slightly below the 1.5440 – 1.5475 zone, which coincides with the 23.6% Fibonacci level, as well as with the upper boundary of the sloping channel. This will prove to be a key test of whether the outlook for the pair will continue to be bullish going forward.

Above here there is not too much in the way of major resistance levels until 1.5620. The break of the descending trend line and the 200-period SMA are pretty significant in my opinion, which suggests to me this resistance zone will be broken soon. However, if see the aforementioned zone hold, support should be found around the key support level of 1.5315. A break below here, further support should be found around the psychological level of 1.5200, which includes the long-term descending trend line.

The MACD oscillator remains above its zero line confirming the bullish momentum of the price action, while the Stochastic found support near its 20 level and moved higher with the %K crossing above the %D.

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