Author: Dmitriy Gurkovskiy, Chief Analyst at RoboForex
The British Pound feels confident against the USD this week and continues rising. One thing that supported the British currency was the Brexit news, which is very positive: the parties are finally moving in the right direction in discussing trade relations and conditions. The UK and the EU representatives are doing their best with a focus on results. Another thing is the British statistics, which are rather mixed indeed, but investors have a lot of numbers to choose from.
So, the European Chief Negotiator for the United Kingdom Exiting the European Union, Michel Barnier, left open a real possibility of reaching the agreement with the UK with the next 6-8 weeks. This period is the same mentioned by the British Prime Minister Theresa May earlier: she told the media that the Brexit talks might be successful as early as in October. British and European politicians couldn’t arrive at a consensus for a long time and put the negotiations on hold several times, because each party wanted to pursue its own goals. And now, when the time is running out, the talks are progressing quickly.
This is about the trade agreement effective for the transition period of the next 2 years. Uncertainty about this issue really made both European and British investors and businesses feel very nervous.
The numbers published earlier today showed that the British labor market is rather mixed. The Unemployment Rate in the country in July remained the same as before, at 4.0%, but the Claimant Count Change expanded by 8.7K, which is more than expected. The Average Earnings Index added 2.6% 3m/y, which is better than both previous and expected readings of 2.4% 3m/y.
The numbers are quite strange and unusual, for summertime at least. As a rule, in summer the tertiary industry requires a lot of seasonal employees, including on a part-time basis.
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There are several things to pay attention to in the H4 chart of GBPUSD. The first one: after breaking the resistance lien of the previous downtrend, the pairs started a new rising correction, which has already reached the retracement of 23.6%. The next possible targets of this correction may be the retracements of 38.2% and 50.0% at 1.3315 and 1.3518 respectively. The second thing is analyzing the chart from the technical point of view. The current short-term uptrend is heading towards the resistance line of the main correctional channel at 1.3110. After breaking this level, the price may move towards the upside projected channel and its resistance level close to the retracement of 50.0% at 1.3518. One also shouldn’t exclude a possibility that the instrument may fall to reach the support line of the main channel. It may happen if the pair breaks the short-term support line at 1.2960.
Disclaimer
Any predictions contained herein are based on the authors’ particular opinion. This analysis shall not be treated as trading advice. RoboForex shall not be held liable for the results of the trades arising from relying upon trading recommendations and reviews contained herein.