British Pound Gets Hammered After Jobs Report

The British pound has fallen rather hard during the trading session on Friday, as the jobs report in America came out at an addition of 425,000 jobs, when most people were expecting a negative report. In fact, Goldman Sachs even suggested that the US could lose 1 million jobs. Because of this, the bond market went crazy in yields shot much higher. This made the US dollar strengthen, and we have seen the British pound give back some of its gains.

The question now is whether or not 1.35 can hold, because not only is it a psychologically important figure, but it is also where the 50 day EMA currently sits. The 50 day EMA is of course an interesting technical indicator for a lot of people, so I do think that it is probably only a matter of time before we see some type of reaction if we get back down there.

GBP/USD Video 07.02.22

That being said, if we were to break down below the 1.35 level it would be a very negative turn of events for sterling. On the other hand, if we were to turn around and take out the 200 day EMA to the upside again, then I think that signifies that we are about to have a major breakout, something that you certainly want to be part of if you get the opportunity. Expect more volatility, the central banks have only made things worse this week but then again, that is typical for central banks.

For a look at all of today’s economic events, check out our economic calendar.