Home Forex GBP/USD bulls jump to 1.1700 on Brexit optimism, softer UK unemployment and US inflation

GBP/USD bulls jump to 1.1700 on Brexit optimism, softer UK unemployment and US inflation

by SuperiorInvest
  • GBP/USD defends two-day bullish momentum at fortnight high.
  • The change in UK claims rose in August, but the ILO unemployment rate fell for the three months to July.
  • Šefčovič has stepped forward to ease Brexit difficulties around the North Coast border.
  • US CPI will be the decisive catalyst for UK inflation.

GBP/USD lifts bids to 1.1700 as cable pair buyers cheer upbeat UK jobs report during Tuesday morning. Even so, cautious sentiment ahead of US inflation data appears to be limiting immediate upside moves.

The main British change in the number of applicants rose to 6.3 thousand in August. compared to the previous market consensus -9.2 ths. and -10.5 thousand Further details indicated that the ILO unemployment rate fell to 3.6% in the three months to July, against 3.8% market forecasts.

Also read: The ILO UK unemployment rate unexpectedly fell to 3.6% in July.

In addition to the largely positive UK jobs data, positive prices are making the headlines Brexit should also have favored GBP/USD prices. However, European Union (EU) Brexit chief Maros Šefčovič said he wants to limit physical customs checks across the Irish Sea to just a few lorries a day in a bid to break the impasse over Northern Ireland, according to the Independent. Protocol (NIP).

Likely aggression can also be positive Bank of England (BOE) due to the election of Liz Truss as Prime Minister of the United Kingdom (PM) as well as the hope of further stimulus from the British government to defend the economy from the woes of recession.

On the other hand, cautious optimism around easing US inflation and expectations of more monetary/fiscal support from China appear to have supported market sentiment and GBP/USD prices. Along the same lines could be updates that Ukraine is gaining success in pushing the Russian military out of some of its areas, which appears to have fueled the market’s cautious optimism, even as it raised fears of a harsh Russian retaliation.

However, geopolitical tensions regarding China and Russia, as well as a likely difficult road ahead for UK Prime Minister Truss, challenge the GBP/USD bulls.

After witnessing the initial reaction to the UK employment report, GBP/USD traders may witness lackluster trading hours ahead of the US. Consumer Price Index (CPI) data for August. Market forecasts suggest that CPI is expected to drop to -0.1% month-on-month from 0.0% previously, which in turn could help cable pair buyers hold the reins.

Technical analysis

A successful trade above the 1.1650-55 support, including the 100-SMA and the one-week-old bullish trend line, joins the bullish MACD signals and supports the bullish direction around GBP/USD. This leaves the cable pair on track for a horizontal area spanning multiple levels marked since August 22, between 1.1745 and 1.1755.

Source Link

Related Posts

%d bloggers like this: