- GBP/USD is on track to finish Thursday’s session with gains of 0.70%.
- Unemployment claims in the US take off some pressure from the Federal Reserve as the labor market cools down.
- GBP/USD Price Analysis: To remain downward bias unless bulls reclaim 1.2000.
GBP/USD bounces off the YTD lows of 1.1802 and rises above 1.1900, following Powell’s two-day appearance at the US Congress. Although Powell’s stance turned hawkish, US Thursday’s data might help the Fed to gradually increase rates, though further confirmation is needed on Friday’s Nonfarm Payrolls. At the time of writing, the GBP/USD is trading at 1.1905 after hitting a low of 1.1828.
Rising unemployment claims improved market sentiment, so the GBP rises
Data revealed by the BLS, Jobless Claims for the week ending on March 4 were 211K higher than expected at 195K. Despite a strong ADP report on Wednesday and more job openings than anticipated, rising unemployment claims could ease the tightness of the labor market. A downbeat US Nonfarm Payrolls report, coupled with high unemployment claims, could reduce the Federal Reserve’s (Fed) needs to tighten conditions at a faster pace.
The US Dollar Index (DXY) edges down by 0.40%, at 105.225, a tailwind for the previously battered Pound Sterling (GBP). In addition, US Treasury bond yields are easing ahead of an essential jobs report and next Tuesday’s inflation data.
On the UK front, an employment report will be released on March 14. Furthermore, the Chancellor of the Exchequer, Jeremy Hunt, will announce the spring budget. Aside from this, money market futures are pricing in a 91% chance that the Bank of England (BoE) will increase rates by 25 bps on the BoE’s next meeting on March 23.
GBP/USD Technical analysis
After the GBP/USD fell to fresh YTD lows at 1.1802, the pair recovered some ground but clashed on an upslope trendline; previous support turned resistance around 1.1930s. The daily Exponential Moving Averages (EMAs) reinforced the downtrend following the formation of a death cross that happened on February 3, which exacerbated the GBP/USD’s fall. Also, for a bullish continuation, the GBP/USD must conquer 1.2000. Contrarily, the GBP/USD first support would be 1.1900, which, once cleared, could pave the way to retest the YTD lows and 1.1800.
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers. The author will not be held responsible for information that is found at the end of links posted on this page.
If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.
FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.
The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.
Recommended content
Editors’ Picks
AUD/USD remained bid above 0.6500
AUD/USD extended further its bullish performance, advancing for the fourth session in a row on Thursday, although a sustainable breakout of the key 200-day SMA at 0.6526 still remain elusive.
EUR/USD faces a minor resistance near at 1.0750
EUR/USD quickly left behind Wednesday’s small downtick and resumed its uptrend north of 1.0700 the figure, always on the back of the persistent sell-off in the US Dollar ahead of key PCE data on Friday.
Gold holds around $2,330 after dismal US data
Gold fell below $2,320 in the early American session as US yields shot higher after the data showed a significant increase in the US GDP price deflator in Q1. With safe-haven flows dominating the markets, however, XAU/USD reversed its direction and rose above $2,340.
Bitcoin price continues to get rejected from $65K resistance as SEC delays decision on spot BTC ETF options
Bitcoin (BTC) price has markets in disarray, provoking a broader market crash as it slumped to the $62,000 range on Thursday. Meanwhile, reverberations from spot BTC exchange-traded funds (ETFs) continue to influence the market.
US economy: slower growth with stronger inflation
The dollar strengthened, and stocks fell after statistical data from the US. The focus was on the preliminary estimate of GDP for the first quarter. Annualised quarterly growth came in at just 1.6%, down from the 2.5% and 3.4% previously forecast.