GBPUSD is under selling pressure in today’s trading and it would seem that none even a generally positive roster of employment data could help it.
Data released by the Office for National Statistics showed that average hourly earnings for three months ending in January was 3.1% higher compared to a year ago. It beat the market forecast which was for a 3.0% uptick. Meanwhile, the Claimant Count Change came in at 17,300 versus the 6,200 estimate for February. Despite this, it’s worth mentioning that employment change was higher at 184,000 than the 140,000 consensus. The rise in the unemployment claims, however, translated to a 0.1% uptick in the unemployment rate to 3.9%.Overall, data for February reflected robust growth in the labor market. It is worth noting that these numbers do not fully reflect the impact of the coronavirus on the UK economy. It could be the reason why GBPUSD is trading at its new 5-month lows at 1.2155. The chart above also shows the currency pair’s muted initial reaction to the reports.
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GBPUSD Outlook
On the daily time frame, it can be seen that GBPUSD is trading around its October 2019 lows. If today’s candlestick closes as a reversal candle, it could mean that GBPUSD may soon recoup some of its losses. Near-term resistance is at 1.2550 where the currency pair topped on September 20.
On the other hand, if sellers are able to sustain their momentum, a close below 1.2180 would effectively break support at the previous low. It could mean that the next major support level for GBPUSD is at its August lows at 1.2015.