GBP/USD Forecast: How to trade the UK jobs report with the Market Impact tool
|- The UK jobs report and especially the wage component is a major market mover for the British Pound.
- The Market Impact tool presents potential opportunities to trade the news.
After inflation surprised to the downside, the UK jobs report will provide another key input for the Bank of England when it comes to making its rate decision. If salaries are lower, the BOE may hesitate and before signaling a hike, pushing Sterling higher. A rise in wages may push the Pound higher. See the full preview here.
Trading the event with the Market Impact tool
- Tradable Positive Trigger: + 0.48 deviation [BUY Pair]
- Tradable Negative Trigger: -0.36 deviation [SELL Pair]
- Key Resistance Level: 1.4080
- Key Support Level: 1.3900
In the last five releases, the GBP/USD moved, on average, 37 pips in the 15 minutes after the release and 68 pips in the 4 hours after the release.
The previous release had a surprise of +2.04 measured in terms of deviation, and the GBP/USD reached the 81 pips of volatility 15 minutes after the release and 105 pips in the following four hours.
If it comes out at higher than expected with a deviation of +0.48 or higher, the pair may go up reaching a range of 29 pips in the first 15 minutes and 72 pips in the following 4 hours. If it comes out lower than expected at a deviation of -0.36 or less, the GBP/USD may down up reaching a range of 20 pips in the first 15 minutes and 59 pips in the following 4 hours.
On the upside, we are watching resistance at 1.4080 and 1.4115. Support levels are to be found approximately at 1.3960 and 1.3930 accordingly to the Confluence Indicator.
From a positioning perspective, supply is noted at 1.4075. Some vestiges of demand can be seen around 1.3800, based on aggregated trading positions from FXStreet's dedicated contributors.
54% of GBP-based pairs are in bullish mode against a basket of 20 world currencies accordingly to the GBP-Bullish Percentage Index. As such, a release which surprises the market with a negative trigger (GBP negative) may lead to a stronger down move in the GBP/USD.
Follow the publication of the figure on the economic calendar. Watch out for the data from the Market Impact tool, projecting the potential price changes according to the deviation. Here is the Market Impact Studies Users Guide
Here is the chart with the levels discussed above:
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