GBP/USD Forecast: UK employment data saves the day
|The GBP/USD pair bounced from a 2-week low of 1.2811 following the release of the latest UK employment figures, better-than-expected. The unemployment rate fell to 4.5% from previous and expected 4.6%, the lowest in 42 years, whilst average earnings excluding bonuses rose to 2.0% in the three months to May, as previous reading was revised up to 1.8% from previous 1.7%. Also, employment climbed 175,000, the most since the end of 2015, to a record 32 million. The pair recovered up to 1.2859, holding nearby, also near the daily high posted at the beginning of the day at 1.2864.
Market's attention turns now to Yellen's testimony before the Congress, with the market looking for clues on upcoming monetary policy movements. Seems unlikely she will surprise investors, but caution prevails ahead of the event.
The 4 hours chart shows that the price has bottomed intraday at the 50% retracement of the latest bullish run from 1.2588 to 1.3029, now struggling around the 38.2% retracement of the same rally at 1.2860. In the mentioned chart, the 20 SMA maintains a sharp bearish slope, providing an immediate resistance at 1.2870, the Momentum indicator remains flat below its 100 level, whilst the RSI indicator bounced from oversold levels, but remains well below its mid-line, all of which limits chances of a stronger recovery.
An upward acceleration through the mentioned 20 SMA could favor additional gains, up to 1.2925, while below the mentioned daily low, next intraday supports and probable bearish targets come at 1.2770 and 1.2730.
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