Article by ForexTime

Sterling moved higher following a drop in the UK unemployment rate which was lower than economists has forecast.  The decline in the rate was below what is considered the ability of the economy to keep wages down given the number of people who are looking for employment.  The 5.5% reading could be considered a signal to the Bank of England that they need to increase rates before inflation begins to pick up.

Other parts of the labor report showed the claimant count rising by 4.6k in September, which was worse than the median forecast for a 2.5k decline, though wage data was perky, with the including-bonus figure rising 3.0% year over year in the three months to August, up from 2.9% previously.

Cable logged an intraday high of 1.5366, since settling around 1.5350, comparing to London opening levels near 1.5280. The pound is showing a 0.6% gain on Tuesday’s closing levels. The data has also seen EUR/GBP extend its correction from yesterday’s five-month peak.

Sterling pushed back through the 20-day moving average at 1.5270, which is now seen as short term support.  Additional support is seen near an upward sloping trend line at 1.52.  Resistance is seen near a downward sloping trend line at 1.55.  Momentum remains positive with the MACD (moving average convergence divergence) index printing in positive territory with an upward sloping trajectory.

Article by ForexTime

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