Advertisement
Advertisement

Sterling Struggles to Hold Fort at 1.34 Handle Ahead of US Jobless Claims Data

By:
Colin First
Published: Jun 7, 2018, 06:50 UTC

The pair has been struggling to move higher

GBPUSD Thursday

The GBPUSD pair has been on a bumpy ride in last 24 hours. While the Sterling managed to gain some ground above 1.34 handle during early Asian market hours, the pair pulled back during the American session yesterday trimming daily gains as the pair retreated to 1.3400 handle post hitting yesterday’s high at 1.3443 and went as low as 1.3398, however positive tone gained yesterday from UK’s macro data release still held influence during American market hours and helped the pair reclaim 1.34 handle. During Asian market hours US Greenback got weaker losing ground against major global currencies which helped UK Sterling consolidate above 1.34 handle.

Pound Struggles

The Sterling has been on a steady lift for two weeks after bottoming out at 1.3204, a six month low as a worse-than-expected downturn in UK economic figures had knocked the Pound down for the first quarter of 2018 forcing the Bank of England (BoE) off of their hawkish perch & cancel the much anticipated May rate hike. The BoE is now on pace for a rate hike sometime in the 3rd quarter and economic data is beginning to recover after a sharp contraction in the first quarter that was blamed on bad weather.

GBPUSD Hourly
GBPUSD Hourly

Little of note is on the economic data docket for Thursday in the UK, and trader focus is going to be moving onto the US jobless claims due at 12:30 GMT, and both Continuing and Initial Jobless Claims are expected to tick up slightly, with continuing claims expected at 1.738 million (prev. 1.726 million) and Initial Jobless Claims forecast at 225 thousand (prev. 221 thousand). As of writing this article the GBPUSD pair is circling around 1.34 price handle and is at 1.3439 mark. On UK’s calendar investors will focus on Halifax House Price Index which is expected to have dovish outcome. From technical perspective a clear break of the resistance area around 1.3450 is needed for the Pound to extend its gains, although investors may wait for next week data and Brexit news before taking firmer positions in the pair. Momentum indicators have moved towards mid line but the price movement in 4 hour chart remains well above 20 day simple moving average clearly supportive of continued uptrend movement. No signs of bearish decline are visible in near future. Expected support and resistance for the pair are at 1.3395 / 1.3375 and 1.3450 / 1.3470 respectively.

About the Author

Colin specializes in developing trading strategies and analyze financial instruments both technically and fundamentally. Colin holds a Bachelor of Engineering From Milwaukee University.

Did you find this article useful?

Advertisement