The British Pound recently corrected higher after a decline against the US dollar, but GBPUSD failed to gain momentum.
GBPUSD Weekly Analysis – British Pound Remains Supported above 1.2360-80
· The British Pound after a decline towards 1.2380 against the US Dollar corrected higher.
· The upside move found sellers near a bearish trend line on the 4-hours chart at 1.2500.
· The UK Claimant Count Change released by the National Statistics posted a lower than expected reading of 9.8K in Oct 2016.
GBPUSD Technical Analysis
The British Pound recently declined from the 1.2673 high to 1.2378 low and found support. The 1.2360-80 area is a monster support, as it prevented a downside move on many occasions. As a result, there was an upside move towards 1.2500.
However, the correction failed near a bearish trend line on the 4-hours chart of GBPUSD at 1.2500. Also, the 38.2% Fib retracement level of the last decline from the 1.2673 high to 1.2378 low acted as a resistance.
The pair is once again moving lower, and approaching the same 1.2380 support area. It could play a major role for GBPUSD in the short term. As long as there is now 4-hours close below 1.2360, the pair may bounce back one more time.
Trade Idea – If you are looking to enter a buy trade, then consider it on dips near the highlighted support area with a stop of around 30-40 pips and look for a move towards 1.2500.
Today, the UK saw a major release of the Claimant Count Change by the National Statistics. The forecast was slated for the number of unemployment people in the UK to change by 2K in Oct 2016. However, the result failed to meet the forecast and came in at 9.8K.
There was a positive as well, as the unemployment rate declined from 4.9% to 4.8%. The report highlighted that “There were 31.80 million people in work, 49,000 more than for April to June 2016 and 461,000 more than for a year earlier. There were 23.24 million people working full-time, 350,000 more than for a year earlier. There were 8.56 million people working part-time, 110,000 more than for a year earlier”.
Overall, the GBPUSD pair remains supported on the downside around 1.2360, and the stated level might play a crucial role in the near term.