- Summary:
- The positive labor data from the UK yesterday was enough to fuel a rally on GBPUSD and break resistance from the symmetrical traingle. Time to buy?
GBPUSD finished yesterday’s trading higher despite risk aversion looming thanks to positive labor data from the UK. The currency pair rose to an intraday high of 1.3083 before finishing the day at 1.3047, 44 pips higher from where it opened.
According to the Office for National Statistics, there were only 14,900 people who filed for unemployment benefits in December. It was initially expected to print at 33,400. Meanwhile, the unemployment rate came in as expected at 3.8% for November. Average earnings also rose by 3.2% in November, beating the forecast at 3.1%.
Consequently, these numbers helped alleviate concerns of a rate cut from the BOE. Remember that there has been talk about the central bank cutting rates soon given the recent disappointing economic data from the UK.
GBPUSD Outlook
The reports were enough to fuel an upside break from the symmetrical triangle on GBPUSD. This indicates that buyers could soon dominate and push the currency pair to around 1.3100.
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Zooming in to the 1-hour chart, we can see that this price seems to align with the neckline resistance of the double bottom chart pattern. When you enrol in our forex trading course, you will learn that this chart pattern is considered as a bullish indicator. A close above 1.3100 could mean that GBPUSD may soon trade to its January 7 highs at 1.3175.
On the other hand, a close below today’s Asian session highs lows at 1.3025 may mean that the currency pair could soon drop to support at 1.2965 where GBPUSD bottom on January 20.