Pound higher ahead of UK job numbers

The British pound continues to gain ground. Currently, GDP/USD is trading at 1.4047, up 0.27% on the day. The pound has posted two winning sessions and is again in positive territory on Tuesday. The currency has enjoyed an excellent February, with gains of 2.5 per cent.

The UK releases key employment data on Tuesday (7:00 GMT). Unemployment claims fell to 7.0 thousand in December, after a sharp gain of 64.3 thousand beforehand. The estimate for January stands at 13.8 thousand. Wage growth has been accelerating over the past five months, improving to 3.6% in December. The upswing is projected to continue, with a forecast of 4.1%. At the same time, the unemployment rate has been rising and is expected to edge up from 5.0% to 5.1%.

 

UK Retail Sales slide

UK Retail Sales suffered a miserable start to the year, with a read of -8.2% for January. This was the second decline in three months and the weakest reading since April. This sharp decline resulted from the tighter health restrictions, which severely crimped consumer spending.

Despite the disappointing retail sales data, the UK economy is expected to open up as the year progresses. The vaccine rollout has been moving at a brisk clip, with some 17 million Britons having already received a first dose. Covid cases and fatalities have been falling, which has raised pressure on the government to relax the lockdown rules. On Monday, Prime Minister Johnson laid out a stage-by-stage plan to reopen the economy, with a full restart of the economy expected in June. However, with new variations of Covid being reported, the ambitious timeline of the reopening of the economy could run into some bumps along the way.

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GBP/USD Technical

  • GBP/USD is putting pressure on resistance at 1.4084. Above, there is resistance at 1.4163
  • There is support at 1.3878. Below, we find support at 1.3751
  • The 50-day moving average is situated at 1.3653

For a look at all of today’s economic events, check out our economic calendar. www.marketpulse.com/economic-events/

This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds.

Kenny Fisher

Kenny Fisher

Market Analyst at OANDA
A highly experienced financial market analyst with a focus on fundamental analysis, Kenneth Fisher’s daily commentary covers a broad range of markets including forex, equities and commodities. His work has been published in several major online financial publications including Investing.com, Seeking Alpha and FXStreet. Based in Israel, Kenny has been a MarketPulse contributor since 2012.