With recent UK data suggesting cooling in the jobs market, Friday’s blowout figure in NFP and stronger than expected wage data suggests a close look will be needed for the British Pound. With the ECB already taking its first rate cut the past week, divergence between US and UK monetary policy will likely be taking the headlines going into the June 20 BoE MPC meeting. Though calls for a rate cut in June are now muted concern in the US side is actually more on keeping rates steady for longer with inflation still high relative to its targets and the jobs market remaining healthy. This suggest vulnerability for GBPUSD over the next few days as markets consider where things stand, the lack of pullback, with respect to the past two months rally.
Resistance
- 1.28175 – Swing High (June 4)
- 1.27626 – Intraday Consolidation Floor
- 1.27416 – Intraday Low / High
Support
- 1.26952 – 23.6 Fib Retracement for Rally from April 22
- 1.26433 – Intraday Consolidation Low
- 1.26195 – 38.2 Fib Retracement for Rally from April 22
Big picture GBPUSD has another potential lower high for the year as Friday’s drop has us forming a double top for the past three weeks of price action. Other things of note in the daily charts is the continuing bearish divergence between prices and the oscillator even as prices are at the 20D Moving Average. Given the extent of the drop Friday and looming patterns in the big picture our bias will be to look for places to short. Ideally we would like to see long wick in hourly charts coming off 1.2741 region though a break of the lows with a solid bearish engulfing may also be seen as an excuse to jump short.
