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GBPUSD: Brexit hopes support sterling as UK unemployment rate rises

GBPUSD
GBPUSD

The GBPUSD price is little changed today as traders react to the disappointing UK jobs data. The pair is trading at 1.3050, which is in the same range it was yesterday.

Data from the Office of National Statistics (ONS) showed that the country’s unemployment rate rose from 4.1% in July to 4.5% in August. That was the highest the figure has been since 2017. At the same time, the number of redundancies rose by 227k in June, July, and August as companies continued to put measures aimed at saving costs.

Still, analysts warn that the worst is yet to come for the UK economy as the government starts to wind down the furlough program. Also, the situation will be worsened by the rising number of Covid-19 cases in the UK.

Brexit is the likely reason why the GBPUSD price has been relatively stable recently. Investors believe that the country will reach a deal with the European Union in the coming days. Such a deal will be important because it will boost trade and confidence among companies and investors about the state of the economy. The relatively weaker US dollar has also played a role in keeping the GBP to USD price relatively stable recently.

GBPUSD technical analysis

The three-hour chart shows that the GBPUSD price reached a high of 1.3083 yesterday. This price was along the 50% Fibonacci retracement level. Today, the price has inched downwards and is now trading at the 15-day exponential moving averages. Still, the price is above the ascending trendline that is shown in pink. Therefore, I suspect that the price will continue rising so long as it is above the rising trendline. If it does, the next level to watch will be the 61.8% retracement at 1.3177.

GBP to USD technical chart