GBPUSD had a volatile day in yesterday’s trading. The currency pair initially traded higher after the employment figures from the UK topped expectations. GBPUSD had tapped an intraday high at 1.2623. However, it quickly gave up its gains when the US retail sales beat forecasts. GBPUSD fell during the New York session and closed at 1.2552.
According to the Office for National Statistics, there was a drop in claimant count by 28,100 in June. It was expected that the number of people applying for unemployment benefits would rise by 250,000. With this, the unemployment rate remained steady at 3.9% from May and beat its 4.2% forecast.
Meanwhile, US retail sales showed a 7.5% while core retail sales came in at 7.3%. Both were expected to come in at 5.0%. With this, market participants grew more confident in the recovery of the US economy because the recent uptick in job growth reflects growth in consumer spending too.
For today, there are no market-moving reports due for release. With that said, we will likely see GBPUSD take its cue from market sentiment. Risk appetite could drive the currency pair higher while risk aversion may weigh it down.
Technical Analysis
On the 1-hour time frame, it can be seen that GBPUSD has been making lower highs and higher lows. In fact, when you connect the most recent highs and lows, you will see that the currency pair is trading within a symmetrical triangle. When you enroll to our free forex trading course, you will learn that this is widely considered as a neutral indicator. A strong bearish close below the triangle at 1.2520 could indicate more bearish momentum ahead. It could then mean that GBPUSD may soon fall to its July 3 lows at 1.2437. On the other hand, a strong bullis close above the triangle at 1.2648 could mean that buyers are dominating trading. GBPUSD could soon then trade higher to 1.2668 where it peaked on July 9.
GBPUSD, 1-Hour Chart
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