GBP/USD. October 24th. The unemployment rate fell in the UK to 4.2%
October 24, 2023 11:26 am
On the hourly chart, the GBP/USD pair on Monday secured its position above the corrective level of 1.2175 and later above the Fibonacci level of 161.8%–1.2250. Consequently, the upward momentum can be continued toward the next level of 1.2336. A drop in quotes below the level of 1.2250 would favor the US currency and a resumption of the decline toward the level of 1.2175.
The wave situation has become clearer after yesterday’s increase. The current upward wave broke through three previous peaks immediately, so the “bearish” trend has changed to “bullish.” Since the “bullish” trend has just begun, it’s too early to talk about its completion. Most likely, we will see at least three waves upward with the mandatory breakout to the level of 1.2336. To end the “bullish” trend right now, a breakthrough at the level of 1.2106, which is about 200 points away, is required.
This morning in the UK, adjusted unemployment data was released. The unemployment rate in August decreased to 4.2%, while the number of jobless claims increased by 20,000. The first report supports the pound, while the second one doesn’t. The first half of the economic statistics package has not significantly impacted traders’ sentiment. Next, we await reports on business activity. If the data turns out to be optimistic (currently, both indicators are below the 50.0 level), then the pound may count on reaching the level of 1.2336 today. I do not consider this an unattainable goal, given the momentum that the bulls have gained. There won’t be any more important events in the UK this week, so today is more crucial for the British pound than other days.
On the 4-hour chart, the pair has made a new reversal in favor of the pound after the formation of a “bullish” divergence on the CCI indicator and consolidation above the descending trend corridor. Currently, quotes have reached the corrective level of 50.0% (1.2289). A close above it will lead to continued growth towards the next level of 1.2450, while a rebound would result in a minor decline. No impending divergences are observed with any of the indicators today.
Commitments of Traders (COT) report:
The sentiment of the “non-commercial” trader category has remained unchanged in the latest report. The number of long contracts held by speculators has decreased by 753 units, while the number of short contracts has increased by 408 units. The overall sentiment of major players has shifted to “bearish,” and the gap between the number of long and short contracts is growing, but now in the other direction: 65,000 versus 76,000. In my view, the prospects for further declines for the British pound remain excellent. I do not anticipate a strong rise in the pound in the near future. I believe that over time, the bulls will continue to offload their buy positions, just as with the European currency.
News Calendar for the US and the UK:
United Kingdom – Employment Change (06:00 UTC).
United Kingdom – Unemployment Rate (06:00 UTC).
United Kingdom – Purchasing Managers’ Index (PMI) in the Manufacturing Sector (08:30 UTC).
United Kingdom – Purchasing Managers’ Index (PMI) in the Services Sector (08:30 UTC).
United States – S&P Global Manufacturing Sector Business Activity Index (13:45 UTC).
United States – S&P Global Services PMI (13:45 UTC).
On Tuesday, the economic events calendar for the UK and the US included several entries. The impact of the news on market sentiment for the rest of the day will be of moderate strength.
Forecast for GBP/USD and trader recommendations:
Selling the British pound may be possible today if there is a rebound from the level of 1.2289 on the 4-hour chart, with targets at 1.2250 and 1.2175. Buying opportunities were available yesterday after establishing a position above the level of 1.2175. At present, these positions can be kept open with a target of 1.2336 or until there is a rebound from the level of 1.2289.
The material has been provided by InstaForex Company – www.instaforex.com
On the hourly chart, the GBP/USD pair on Monday secured its position above the corrective level of 1.2175 and later above the Fibonacci level of 161.8%–1.2250. Consequently, the upward momentum can be continued toward the next level of 1.2336. A drop in quotes below the level of 1.2250 would favor the US currency and a resumption of the decline toward the level of 1.2175.
The wave situation has become clearer after yesterday’s increase. The current upward wave broke through three previous peaks immediately, so the “bearish” trend has changed to “bullish.” Since the “bullish” trend has just begun, it’s too early to talk about its completion. Most likely, we will see at least three waves upward with the mandatory breakout to the level of 1.2336. To end the “bullish” trend right now, a breakthrough at the level of 1.2106, which is about 200 points away, is required.
This morning in the UK, adjusted unemployment data was released. The unemployment rate in August decreased to 4.2%, while the number of jobless claims increased by 20,000. The first report supports the pound, while the second one doesn’t. The first half of the economic statistics package has not significantly impacted traders’ sentiment. Next, we await reports on business activity. If the data turns out to be optimistic (currently, both indicators are below the 50.0 level), then the pound may count on reaching the level of 1.2336 today. I do not consider this an unattainable goal, given the momentum that the bulls have gained. There won’t be any more important events in the UK this week, so today is more crucial for the British pound than other days.
On the 4-hour chart, the pair has made a new reversal in favor of the pound after the formation of a “bullish” divergence on the CCI indicator and consolidation above the descending trend corridor. Currently, quotes have reached the corrective level of 50.0% (1.2289). A close above it will lead to continued growth towards the next level of 1.2450, while a rebound would result in a minor decline. No impending divergences are observed with any of the indicators today.
Commitments of Traders (COT) report:
The sentiment of the “non-commercial” trader category has remained unchanged in the latest report. The number of long contracts held by speculators has decreased by 753 units, while the number of short contracts has increased by 408 units. The overall sentiment of major players has shifted to “bearish,” and the gap between the number of long and short contracts is growing, but now in the other direction: 65,000 versus 76,000. In my view, the prospects for further declines for the British pound remain excellent. I do not anticipate a strong rise in the pound in the near future. I believe that over time, the bulls will continue to offload their buy positions, just as with the European currency.
News Calendar for the US and the UK:
United Kingdom – Employment Change (06:00 UTC).
United Kingdom – Unemployment Rate (06:00 UTC).
United Kingdom – Purchasing Managers’ Index (PMI) in the Manufacturing Sector (08:30 UTC).
United Kingdom – Purchasing Managers’ Index (PMI) in the Services Sector (08:30 UTC).
United States – S&P Global Manufacturing Sector Business Activity Index (13:45 UTC).
United States – S&P Global Services PMI (13:45 UTC).
On Tuesday, the economic events calendar for the UK and the US included several entries. The impact of the news on market sentiment for the rest of the day will be of moderate strength.
Forecast for GBP/USD and trader recommendations:
Selling the British pound may be possible today if there is a rebound from the level of 1.2289 on the 4-hour chart, with targets at 1.2250 and 1.2175. Buying opportunities were available yesterday after establishing a position above the level of 1.2175. At present, these positions can be kept open with a target of 1.2336 or until there is a rebound from the level of 1.2289.
The material has been provided by InstaForex Company – www.instaforex.com
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