UK Labour Data Improves Again
The British Pound is back in favour this week following a bumper set of labour market indicators this morning. UK wages were seen rising by 7% over the three months ending in March, marking their fastest pace of growth since summer 2021. Alongside this, the unemployment rate was seen falling back to its lowest level since 1974 at 3.7%, marking a decline from the prior month’s 3.8% reading.
With the labour market continuing to tighten and wages continuing to rise, the backdrop for inflation remains incredibly fertile. With this in mind, BOE rate hike expectations remain firmly planted. The BOE has recently warned over the longer-run impact of its tightening policy, forecasting a slowdown later in the year. However, in the face of such data, there is little to suggest the BOE will deviate from its near-term plan of continuing to hike rates.
Technical Views
GBPUSD
GBPUSD is turning higher off the latest test of the bear channel support. With price finding demand on approach to the 1.2022 level, the market is now attempting to get back above the 1.2426 level. With both MACD and RSI turning bullish, the focus is on a continuation higher while above this level with 1.2626 and the channel top, the next resistance area to note.
Disclaimer: The material provided is for information purposes only and should not be considered as investment advice. The views, information, or opinions expressed in the text belong solely to the author, and not to the author’s employer, organization, committee or other group or individual or company.
Past performance is not indicative of future results.
High Risk Warning: CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 75% and 75% of retail investor accounts lose money when trading CFDs with Tickmill UK Ltd and Tickmill Europe Ltd respectively. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money.
Futures and Options: Trading futures and options on margin carries a high degree of risk and may result in losses exceeding your initial investment. These products are not suitable for all investors. Ensure you fully understand the risks and take appropriate care to manage your risk.
With 10 years of experience as a private trader and professional market analyst under his belt, James has carved out an impressive industry reputation. Able to both dissect and explain the key fundamental developments in the market, he communicates their importance and relevance in a succinct and straight forward manner.