- The UK jobs report came out better than expected, with Average Earnings standing out.
- The GBP/USD reacted positively to the publication, rising towards a stubborn resistance line.
- Sterling is better positioned technically ahead of the Fed decision later today.
UK Average Earnings are up 2.8% YoY, better than 2.6% that had been expected for the month of January. In addition, the figure for December was upgraded rom 2.6% to 2.7% YoY. Excluding bonuses, there were no surprises with 2.6% YoY after 2.5% beforehand, but this is good news anyway.
Another positive surprise was the drop in the Unemployment Rate back to 4.3% after a short spell at 4.4%. The only disappointment came from the Claimant Count Change for February, which showed a rise of 9,200 in the number of jobless claims, worse than a drop of 5,000 projected.
All in all, the figures came out above expectations and the GBP/USD rose from around $1.4040 to nearly $1.4070.
The good news helps Sterling recover from the disappointing inflation report yesterday which showed a deceleration to 2.7% YoY, worse than had been projected. The Bank of England convenes tomorrow and will digest all the data and also the Retail Sales report coming out tomorrow. On Monday, cable jumped on the news that a deal was reached between the EU and the UK on Brexit and the pair reached similar levels.
Yet before Mark Carney and co. have their say, the GBP/USD will be at the mercy of the US Federal Reserve. Fed Chair Jerome Powell is set to deliver a rate hike in his first decision as Fed Chair. Markets will focus on the next moves: the dot-plot for the remainder of the year, 2019, and the long-term rate. Moreover, there are reports that Powell will decide to hold a press conference after every rate decision, opening speculation for an accelerated path of hikes.
See Fed Preview: Dollar-friendly dot-plot before a Powell punishment?
GBP/USD Technical Picture - Stops at resistance for now
The GBP/USD is looking good: the RSI is significantly above the 50 point and maintains a safe distance from overbought territory. Momentum is picking up and the pair is above the 50-day Simple Moving Average.
At the time of writing, the pair is struggling with resistance at $1.4070. The line capped the pair on Tuesday and on February 26th. The knee-jerk move to $1.4088 on Monday was shortlived and looks like a false break.
Further above, $1.4160 capped the pair on February 16th and $1.4250 is next up.
The round number of $1.4000 serves as support, and it is followed by $1.3940, the 50-day SMA. Further below, $1.3890 was a low point last week.
-636572226495779909.png)
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
EUR/USD stays in daily range slightly below 1.0900
EUR/USD continues to move up and down in a narrow band slightly below 1.0900 in the second half of the day on Monday. The modest improvement seen in risk mood makes it difficult for the US Dollar to find demand and helps the pair stay in range.
GBP/USD treads water above 1.2900 amid risk recovery
GBP/USD is keeping its range play intact above 1.2900 in the American session on Monday. The positive shift seen in risk sentiment doesn't allow the US Dollar to gather strength and helps the pair hold its ground ahead of this week's key data releases.
Gold drops to fresh 10-day low below $2,390
Gold stays under persistent bearish pressure after breaking below the key $2,400 level and trades at its lowest level in over a week below $2,390. In the absence of fundamental drivers, technical developments seem to be causing XAU/USD to stretch lower.
Crypto Today: Bitcoin is less than 10% away from all-time high as Ethereum ETF approval anticipation brews
Bitcoin trades around $68,000 early on Monday, less than 10% away from its all-time high of $73,777 on Binance. Ethereum ETF anticipation brews among traders and Ether investment products see inflow of over $45 million in the past week.
Election volatility and tech earnings take centre stage
/stock-market-graph-gm532464153-55981218_XtraSmall.jpg)
The US Dollar managed to end the week higher as Trump Trades ensued. Safe-havens CHF and JPY were also higher while activity currencies such as NOK and NZD underperformed.