GBPUSD stands at the front foot ahead of UK jobs data
Cable stands at the front foot on Wednesday and attempts to fully recover previous day’s dip which found footstep at 1.40 zone, which previously acted as strong resistance and now offers solid support.
Overall bullish structure off 1.3711 (01 Mar low) remains intact, with current action after Monday’s failure under 1.41 target, seen as consolidation.
Strong barrier at 1.41 (Fibo 61.8% of 1.4345/1.3711 bear-leg) marks pivotal point, break of which would signal continuation of recovery leg from 1.3711.
Firm bullish setup of daily techs is supportive, but markets look for the key data today which are expected to provide strong signals.
UK jobs data show positive forecasts and better than expected earnings (Jan 2.6% f/c vs 2.5% in Dec) as well as jobless claims (Feb -3.1% f/c vs -7.4 in Jan) would support those advocating for further rate hikes this year and generate bullish signal for pound.
Also, Fed monetary policy outcome will be closely watched today.
Bullish scenario on upbeat UK data sees eventual break through 1.41 pivot and extension towards 1.42 zone (Fibo 76.4% of 1.4345/1.3711), with stretch towards 1.4277 double-top (01/02 Feb) not ruled out on stronger acceleration.
Negative scenario on UK data miss would risk penetration of daily cloud (cloud top lies at 1.3961) and test of cluster of daily MA’s, laying between 1.3942/08, loss of which would be bearish signal.
Res: 1.4066; 1.4088; 1.4102; 1.4144
Sup: 1.4000; 1.3961; 1.3942; 1.3908