British Pound: USD/GBP (GBP=X) market movement depends upon the UK labor market report

British Pound: USD/GBP (GBP=X) market movement depends upon the UK labor market report

British Pound: USD/GBP (GBP=X) market movement depends upon the UK labor market report

The financial markets exhibited thin volatility in the wake of a national holiday in the United States. Well, the traders are back and the economic calendar is also loaded with some high impact economic events. Most of the focus will remain on the labor market report from the United Kindom, Current Account from New Zealand and German ZEW Economic Sentiment from Eurozone. Here’s what to expect from these events.

Key Economic Event’s Outlook

The UK labor market reports aren’t expected to surprise the market. These events are forecast to be neutral, just like the previous month.

Average Earnings Index 3m/y – It’s a leading indicator of consumer inflation and shows a change in price for businesses and the government pay for labor, including bonuses. Simply put, when businesses pay more for labor, the higher costs are usually passed on to the consumer which leads to inflation.

The UK’s Office for National Statistics reported a dramatic jump of 3.4% average earnings in February 2019. While economists are expecting it to slightly drop to 3.2% this month.

Unemployment Report – Despite the Brexit uncertainty counting on the UK financial and consumer spending, the UK employment report seems solid. The recent jobs report is expected to be neutral.

Jobless claims rose to 14.2K in February but economists are expecting a drop to 13.1K in March. The smaller figure shows a growth in the labor market and it encourages the BOE (Bank of England) to keep the policy hawkish.

In addition to this, the unemployment rate is expected to remain unchanged at 4.1%.

Overall, the bias in prices is: Upwards.

The projected upper bound is: 1.35.

The projected lower bound is: 1.31.

The projected closing price is: 1.33.

Candlesticks

A white body occurred (because prices closed higher than they opened).
During the past 10 bars, there have been 4 white candles and 6 black candles for a net of 2 black candles. During the past 50 bars, there have been 23 white candles and 25 black candles for a net of 2 black candles.

A spinning top occurred (a spinning top is a candle with a small real body). Spinning tops identify a session in which there is little price action (as defined by the difference between the open and the close). During a rally or near new highs, a spinning top can be a sign that prices are losing momentum and the bulls may be in trouble.

Momentum Indicators

Momentum is a general term used to describe the speed at which prices move over a given time period. Generally, changes in momentum tend to lead to changes in prices. This expert shows the current values of four popular momentum indicators.

Stochastic Oscillator

One method of interpreting the Stochastic Oscillator is looking for overbought areas (above 80) and oversold areas (below 20). The Stochastic Oscillator is 70.5780. This is not an overbought or oversold reading. The last signal was a buy 6 period(s) ago.

Relative Strength Index (RSI)

The RSI shows overbought (above 70) and oversold (below 30) areas. The current value of the RSI is 57.96. This is not a topping or bottoming area. A buy or sell signal is generated when the RSI moves out of an overbought/oversold area. The last signal was a sell 13 period(s) ago.

Commodity Channel Index (CCI)

The CCI shows overbought (above 100) and oversold (below -100) areas. The current value of the CCI is 71. This is not a topping or bottoming area. The last signal was a sell 12 period(s) ago.

MACD

The Moving Average Convergence/Divergence indicator (MACD) gives signals when it crosses its 9 period signal line. The last signal was a buy 2 period(s) ago.

Rex Takasugi – TD Profile

FOREX GBP= closed up 0.001 at 1.327. Volume was 60% below average (consolidating) and Bollinger Bands were 10% narrower than normal.

Open High Low Close Volume___
1.325 1.328 1.324 1.327 71,254

Technical Outlook
Short Term: Neutral
Intermediate Term: Bullish
Long Term: Bullish

Moving Averages: 10-period 50-period 200-period
Close: 1.32 1.30 1.30
Volatility: 16 11 11
Volume: 173,382 172,342 178,715

Short-term traders should pay closer attention to buy/sell arrows while intermediate/long-term traders should place greater emphasis on the Bullish or Bearish trend reflected in the lower ribbon.

Summary

FOREX GBP= is currently 2.2% above its 200-period moving average and is in an upward trend. Volatility is extremely high when compared to the average volatility over the last 10 periods. There is a good possibility that volatility will decrease and prices will stabilize in the near term. Our volume indicators reflect volume flowing into and out of GBP= at a relatively equal pace (neutral). Our trend forecasting oscillators are currently bullish on GBP= and have had this outlook for the last 4 periods.

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