Sterling has moderately traded firmer on UK labour data for March. Nevertheless, what does momentum indicators moving within the oversold territory suggest? Learn more with this 15 May GBPUSD Fundamental Analysis.
15 May, HotForex – UK labour data showed expected perkiness in wage growth, which rose at a 2.9% y/y in the ex-bonus average weekly household income headline over the three months to March.
UK Jobs Data Overview
This matched the median forecast, and marked a new cycle high rate after a slight pickup from the 2.8% y/y figure in the three months to February. The inflation-adjusted figure came in at +0.4% y/y. The official jobless rate came in at 4.2%, unchanged from the previous month and the lowest level since 1975, which was also a figure that had been expected. The employment rate came in at 75.6%, the highest rate since comparable records began in 1971.
The number of economically inactive people also fell both on the three-month versus three-month and y/y comparisons, with the rate falling to 21.0% from 21.5% in the prior year. Overall, a strong report and one that should help revive BoE rate hike expectations for a 25 bp lift in the repo rate as soon as August.
15 May GBPUSD Fundamental Analysis
Sterling has moderately traded firmer on UK labour data for March. With productivity lagging, expectations for a resumption of gradual BoE tightening later in the year should find some renewed support. The pound lifted out of pre-data intraday losses, with Cable gaining some 30 pips in lifting to the 1.3550 area, and EURGBP falling by some 20 pips to the 0.8795-0.8800 area. The gain matched a post-data spike of over 1 bp in the UK’s 2-year yield, though this subsequently reversed, and the pound’s upward bias stalled out.
Cable however remains below the PP level and the recent swing high in the hourly chart at 1.3575. Hence despite the swing higher on data, the negative momentum still holds intra-daily, with momentum indicators moving within the oversold territory, suggesting further weakness. Immediate Resistance is at 1.3575 and immediate support comes at 1.3500. Only a break above PP level could suggest a retest of the 1.3600 level.
This article about 15 May GBPUSD Fundamental Analysis was written by Andria Pichidi, Market Analyst at HotForex. The provided article is a general marketing communication for information purposes only. It does not constitute an independent investment research. Nothing in this communication contains an investment advice or an investment recommendation. It also does not contain a solicitation for the purpose of buying or selling of any financial instrument.
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