The GBPUSD remained slightly above 1.2400 as the market relaxed and waited for the jobless claims data from the United States. The numbers, which will be released at 12:30 pm are expected to show that bleeding continued in the labour market.
Just last week, the numbers showed that more than 3.2 million people filed for unemployment benefits in the previous week. This week, the number could range between 3.5 million and 6 million if analysis by Citi and Goldman Sachs is to go by.
The market today shrugged-off a relatively better housing data from the UK. Data from Nationwide Building Society (NBS) showed that annual house prices growth rose to 3.0%, which was the best number since January 2018. The market was right to ignore this number. According to the organization’s chief economist, the data did not include the actions in the final part of the month, when the government halted the property sector. In a statement, he said:
It is important to note that, while we use a full month’s worth of data to generate the index, the cut-off point is slightly before the end of the month. This means that developments following the UK government’s lockdown will not be reflected in these figures.
Analysts expect the property sector, which was gaining steam before the crisis, to be among the most affected. Many people are expected to fall behind on their mortgages, and others are expected to ignore buying homes all together. Indeed, as I reported yesterday, JD Sports, a big retailer in the country had stopped paying rent.
A collapse of the real estate sector would have major implications on the economy. As you recall, it was the main reason why the past financial crisis happened.
There is not much to write about the GBPUSD pair. On the hourly chart, the pair is trading at around 1.2400, which is close to where it has been trading since March 27. In addition, the ATR, which is a good measure of volatility has declined to its lowest level in weeks. When this happens, it tends to be a calm before the storm, which tends to lead to a sharp breakout. The challenge is to predict the direction.