UNITED KINGDOM – The GBP/USD remains steady at the $1.30 handle, with signs pointing to the forex pair reaching 1.3050. The pair finds itself in a good position and bolstered by a positive UK jobs report. It’s also showing remarkable resilience despite the current Brexit drama.
The data on employment will help dictate in which direction the GBP/USD will go. The Technical Confluences Indicator currently show the pair enjoying solid support at the 1.2996 level.
The Confluence Detector chart showed a significant mass of lines that include the Fibonaccis for 23.6% one-week and the 38.2% one-day, the Simple Moving Average (SMA), the Bollinger Bands 15min-Lower and one hour-Middle.
Aside from the support the GBP/USD has at 1.2996, it also has a major cushion standing-by at 1.2942. This is also the confluence points of the Pivot Point for one-week Support 1 and one-day Support 2.
The United Kingdom’s Office for National Statistics (ONS) job data report revealed that the country’s Average Weekly Earnings (excluding bonuses) reached a 3.4%Mo Year-on-Year (YoY) in November as opposed to the previous 3.5%. The Average Earnings that included bonuses was at 3.2%Mo YoY in November. It was at 3.2% the last time. Analysts was expecting it to be at 3.1%.
The UK’s official jobless rate number was at a steady 3.8% in November, with the claimant count showing a minimal increase. According to the ONS, the number of citizens who claimed jobless benefits in December rose by 14,000. It was initially projected to hit more than 22,600.
The surprising numbers sent a wave of fresh bids and the GBP/USD went up by almost 25-pips to reach 1.3035, a session high. Traders are not expecting any further upside as the post-Brexit trade deal remains uncertain. There’s also the looming possibility of a higher rate cut by the Bank of England (BoE).
The positive job data has pushed the Brexit issue to the sidelines, although traders know this is only temporary. They’re also surprisingly sanguine about the recent drama surrounding Brexit.
The UK parliament recently denied three amendments to the Brexit Withdrawal Agreement Bill (WAB). It’s Prime Minister Boris Johnson’s first taste of defeat in the House of Lords after his election.
One of the amendments was a proposal for a physical document that will prove an EU national has the right to live in the UK after it leaves the EU. The other two dealt with suggestions on how to safeguard the sovereignty of UK courts with regards to the EU Court of Justice.