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British Pound Gains a Bid after solid Labor Data

British

Overnight the British pound soared higher against the U.S. dollar. The GBP/USD currency exchange rate hit its highest price level since 24 February after good labor market data out of the United Kingdom.

The economic data showed that the UK unemployment rate fell again. The March number came in at 4.8 percent as the government started to gradually reopen their economy. The decline was better than the median market forecast for 4.9 percent.

The British economy also added more jobs than forecasted for the three months into March. Average hourly earnings also rose better than expected to 4.6 percent. The median forecast was for four percent. This was good news for the British pound.

The economic calendar, for today, is all about consumer prices. Inflation. The United Kingdom will publish their monthly core and headline consumer price index. Canada will also release their monthly core and headline consumer prices and the euro area is releasing their final monthly consumer price index (CPI). The United Kingdom will also release their monthly producer price index (PPI) as well as monthly housing price index (HPI) data.

The U.S. central bank will publish their monthly monetary policy meeting minutes. This is likely to be the most volatile release on the calendar for Wednesday. The United States will also release weekly crude oil inventory data.

Daily British Pound Technical Analysis (GBP/USD)

Looking at price action on the above four hour MT 4 price action chart, the GBP/USD Forex market hit a high price point of 1.4220. As mentioned above, the highest price level since February. The British pound is trading above the key upside barrier in play at 1.4168 as well.

Price action is also above the 15 day exponential moving average. Both the relative strength index and the MACD histogram are sloping higher. A daily close above 1.4168 opens the door to challenge 1.4240.

A daily close back below 1.4168 opens the door to challenge the 15 day exponential moving average. This technical support level lines up around 1.4155.

About David Frank

David has his MA and PhD in Economics. He is a technical analyst who has been trading in the Forex world for over a decade. As an analyst and trader, David believes in the big picture by blending together technical analysis with the fundamentals behind the scenes in the Forex and Bond markets. David’s trading strategy is unique. He blends an understanding of fundamental and macroeconomics with technical analysis to offer a unique view into Forex. He applies several strategies including carry long positions, to take advantage of high yields in non-volatile markets, as well as using quicker, chart related analysis for day trading.

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