British pound (GBP) price outlook
- Employment in the UK rose for the fifth month in a row.
- GBP / USD near a fresh perennial peak.
The latest UK job data statement showed a decline in employment growth and an unemployment rate that exceeded market expectations. According to the National Statistics Office (ONS), there are some signs of early recovery in the labor market, with the number of employees rising for the fifth consecutive month, albeit below pre-coronavirus pre-pandemic levels of 772,000.
This week is preceded by the last Wednesday’s Inflation Report, where Markit’s PMI (May) is rounded off on Friday. See all economic data and events in the market in real time DailyFX calendar.
WhatDemining the strength of Sterling, backed by stronger data, the next stage in the re-opening of the UK economy and the success and weak US dollar has pushed GBP/USD higher and higher. Satellite trades are currently just under 1,4200, the freshest of several years, with about 40 connectors here. There seems to be little to prevent the GBP / USD from reaching this target now, as the latest CoT report shows an increase in short positions in the US dollar, while Sterling’s long positions have increased.
The daily GBP / USD chart continues to suggest higher prices for all three moving averages in a positive composition, while the bullish trend line remains undisputed. The pair’s volatility remains low, suggesting that the recent higher grind continues, leaving February 24 a major threat. Traders should be aware FOMC minutes released on Wednesday, where the Fed’s inflationary thoughts are closely monitored. Any interesting hints from the federation could further boost the GBP / USD rise.
GBP / USD daily price chart (June 2020 – May 18, 2021)
Retailer details show 37.27% of traders have network lengths, the ratio of traders to short and long values is 1.68 to 1. Usually we view the contradictory situation of the crowd and the fact that traders are net short indicates a continuing rise in GBP / USD prices.Positioning is more than short than yesterday, but less net-short than last week. The combination of the current mood and recent changes gives us even more mixed GBP / USD trading bias.
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