On Thursday, the GBP/USD rate made a failed attempt at passing the resistance of the 1.4200 level. It was followed up by a sharp decline below the support zone of the late May low levels at 1.4100/1.4095.
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At mid-day on Friday, at 12:30 GMT, the value of the US Dollar plummeted due to the release of the US monthly employment data. The GBP/USD surged by 70 base points or 0.50%.
The US data release consisted of three data sets, which each showed different results.
The US Average Hourly Earnings increased by 0.5% instead of the forecast 0.2%. The Unemployment Rate was at 5.8% instead of the forecast 5.9%. Both of these numbers, in theory, strengthened the value of the US Dollar, as less unemployed population with larger salaries creates a larger domestic demand for the USD.
However, the US Non-Farm Employment Change came in lower than forecast. Namely, 559,000.00 people found jobs in the month instead of the expected 645,000.00. In the view of the market this outweighed the positive numbers, and a value adjustment of the USD down occurred.
Economic Calendar
On Thursday, the US Consumer Price Index, US Core Consumer Price Index and the US Unemployment Claims are set to be released exactly at 12:30 GMT. Most likely, all USD asset and pair moves from 12:30 to 12:35 could be attributed to these data sets.
The rate has moved from 18.1 to 47.3 pips during the release of the CPI since January 2021, and 9.5 to 22.8 pips on the release of the US Unemployment claims since May 6.
Click on the link below to find out more about the data releases of this and other currency exchange rates.
GBP/USD short-term review
The surge of the GBP/USD broke patterns and passed technical levels until it reached the 1.4200 mark. The 1.4200 level provided the rate just the same as it did on Thursday. Afterwards, the rate retraced to the combined support of the weekly simple pivot point at 1.4169 and the 100 and 200-hour simple moving averages at 1.4162.In the case of the support levels from 1.4162 to 1.4169 holding, the rate could make another attempt to pass the resistance of the 1.4200 level. If the 1.4200 mark fails to hold, the weekly R1 simple pivot point at 1.4246 could be reached.
On the other hand, a decline below the support cluster could reach for the 55-hour simple moving average at 1.4143. Afterwards, the weekly S1 simple pivot point at 1.4119 might be reached. In the case of both support levels being passed, the 1.4080/1.4100 zone would likely be reached.
Hourly Chart
GBP/USD daily chart's review
On the daily candle chart, the GBP/USD remains in the borders of the channel up pattern, which has guided it since early April. The rate is trading sideways in the borders of the pattern.In addition, note that the rate reversed its February surge just before reaching the 1.4250 level. Namely, the surge ended at the 1.4243 mark.
Daily chart
On Friday, traders were short, as 70% of trader open position volume on the Swiss Foreign Exchange was in short positions.
Meanwhile, in the 100-pip range around the rate the pending orders were 70% to sell.