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GBP/USD Daily Forecast – All Eyes On U.S. Initial Jobless Claims

By:
Vladimir Zernov
Published: Apr 2, 2020, 06:54 UTC

GBP/USD is set to experience increased volatility on the day the most important economic release of the week is published.

GBP/USD

In this article:

The Most Important Economic Data Of The Week Is Due Today

The previous release of the U.S. Initial Jobless Claims shocked the market with a record high of 3.3 million jobless benefit applications, but led to a rally in the markets.

This time, the economists expect to see an even bigger number of Initial Jobless Claims. Clearly, this is the main market-moving data of the week since it will show how bad the situation in the U.S. job market has become after coronavirus containment measures have been implemented.

At this point, about 80% of Americans have been affected by such measures, and the pace of the virus spread in the U.S. signals that virus containment measures could soon impact the whole population.

Currently, there are 216,721 cases in the U.S., according to data from Johns Hopkins University. The UK saw a surge in cases to 29,865, which does not provide any hope for a quick end to virus containment measures.

Estimates of the actual job losses in the U.S. wary widely. Even more importantly, the markets’ reaction to the release could be completely unpredictable as shown by the previous week’s release.

Theoretically, a poor Initial Jobless Claims data should lead to the influx of money into the U.S. dollar, which serves as a safe haven asset of last resort.

However, riskier assets can get a boost from the certainty provided by the release – until the Initial Jobless Claims data is published, investors and traders can paint themselves an armageddon picture. In this case, any data provides comfort as it removes uncertainty.

Technical Analysis

gbp usd april 2 2020

GBP/USD continues to consolidate around the 1.2400 level. The U.S. dollar made several attempts to gain ground against the British pound, but these attempts were stopped below 1.2400.

Currently, the ultimate support for the pair is at 20 EMA near the 1.2300 level. If GBP/USD is able to breach this support to the downside, the current upside trend will cease to exist.

On the upside, the pair will have to deal with a resistance area between the local highs at 1.2480 and the 50 EMA at 1.2520. If GBP/USD is able to get through this resistance area, it will be able to head towards 1.2750, completing the rebound and returning to pre-crisis levels.

About the Author

Vladimir is an independent trader and analyst with over 10 years of experience in the financial markets. He is a specialist in stocks, futures, Forex, indices, and commodities areas using long-term positional trading and swing trading.

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