GBP/USD Forecast with UK Employment in Focus

Summary:

GBP/USD is trading sideways as investors await further cues from the UK jobs data. The pair will also react to US retail sales.

GBP/USD is on a consolidation pattern as investors await further cues from the UK job data and US retail sales numbers. Analysts expect UK unemployment rate to have dropped from 4.8% in March to 4.7% in April. Notably, the number of unemployed individuals in the country has been declining steadily since January. With the easing of lockdown measures and reopening of the UK economy, economists expect the number of employed people to have risen by 150,000 in April compared to 84,000 in March.

GBP/USD will also be reacting to the US retail sales. In April, retail sales were unchanged as the impact of the COVID relief checks began to fade. In May, analysts expect a reading of -0.7%, which would be bearish for the US dollar. The inflation data comes a day ahead of the anticipated Fed interest rate decision.

GBPUSD technical outlook

GBP/USD is trading sideways for the third consecutive session. At the time of writing, it is down by 0.01% at 1.4111. On a two-hour chart, it is trading below the five and ten-week exponential moving averages. This is an indication that the pair may experience further weakness.

I expect the currency pair to continue finding support along the crucial level of 1.4100. A move lower will have the bears targeting the next support level at 1.4077. On the flip side, it may rise to find resistance along the 50-day EMA at 1.4128. Better-than-expected UK job numbers may push the prices higher to 1.4150.