Marshall Gittler
Trading Analysis
GBP/USD
The dollar traded lower against most of the other G10 currencies during the European morning Friday, ahead of the US CPI data for March.
The spotlight today was the UK employment data for February. The unemployment rate for the month ticked down to 5.6% from 5.7% previously, as expected. The surprise was the slowdown in average weekly earnings (to +1.7% yoy from +1.8% yoy) previously. However, having in mind that in February, the headline inflation rate declined to 0.0% from +0.3%, the real wages rate is higher than before (+1.7% vs +1.5%). Since the decline in the unemployment rate was already expected, this could be the trigger for the rally of the pound above the psychological line of 1.5000.
GBP/USD surged during the European morning following the UK employment data and managed to move above the round figure of 1.5000 (S1). I believe that the break is likely to encourage the bulls to keep pushing towards our next resistance line of 1.5100 (R1). As long as the rate is printing higher peaks and higher troughs above the short-term black uptrend line, I would see a positive short-term picture. Our short-term oscillators complete the positive near-term outlook. The RSI edged above its 70 line and is pointing up, while the MACD stands above both its trigger and zero lines, also pointing north. Zooming out to the daily chart, I see that Cable is still trading below the 80-week exponential moving average, which keeps the large downtrend intact. However, there is positive divergence between our daily oscillators and the price action, hinting that further upside correction could be in the works.
Support: 1.5000 (S1), 1.4950 (S2), 1.4875 (S3)
Resistance: 1.5100 (R1), 1.5165 (R2), 1.5250 (R3)
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