GBP/USD Forecast: Unmotivated by Mixed UK Data

GBP/USD Forecast: Unmotivated by Mixed UK Data

18 May 2016, 11:20
Roberto Jacobs

GBP/USD Forecast: Unmotivated by Mixed UK Data

The American dollar traded generally higher across the board at the beginning of this Wednesday an ahead of the FOMC Minutes, although the GBP/USD pair held within a tight range ahead of the release of UK employment data, which resulted overall mixed.


In the first quarter of the year, and according to official data, the number of people in work increased, whilst average earnings, including bonus, surged to 2.0% from previous 1.8%. The unemployment rate remained steady at 5.1%. 

The Pound ticked modestly higher against the greenback with the news, but the recovery stalled at 1.4452,  from where the pair is currently retreating to fresh daily lows. The technical picture suggests the upside will remain limited, as the technical indicators head south, with the RSI already within bearish territory, at 46, whilst the price is pressuring its 20 SMA around 1.4410. 

The pair is now poised to test the 1.4370 level, the 61.8% retracement of the latest bullish run, with a break below it opening doors for a slide down to 1.4320/30. Should this last support give up, the next bearish target is 1.4250.

The pair has a Fibonacci resistance around 1.4450, the high posted right before the news, so it will take some firm recovery above it to see the pair changing course this Wednesday, and extending up to 1.4490.


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