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GBPUSD Upward Trend Remains a Priority
4/6/2023 1:42 PMThe GBP/USD pair has been gaining in value for the fifth week in a row and yesterday reached its highs of June at 1.2525.
The US currency is under pressure as a result of the labor market cooling: according to the February JOLTS report, the ratio of vacancies to the number of citizens looking for work fell to 1.67, and the number of open vacancies decreased more than expected, from 10.563M to 9.931M. Employment in March, according to Automatic Data Processing (ADP) company, increased by 145.0K, which is less than both the expectations of 200.0K and the February indicator of 261.0K. Against the background of these statistics, experts believe that the US Federal Reserve may postpone the next tightening of monetary policy and leave the interest rate unchanged at the May meeting, which is also confirmed by regulator officials. Thus, the head of the Federal Reserve Bank of Cleveland, Loretta Mester, who emphasized on Tuesday that the rate should be raised above 5.0%, already on Wednesday said that it was too early to say whether the cost of borrowing would be increased again in May.
Against this background, the pound looks preferable for investment: the British economy is recovering, and experts hope it will be able to avoid a recession. According to March data, manufacturing PMI corrected to 47.9 points, offset by an increase in service PMI to 52.9 points. Local support for the currency today is provided by the March data on the Halifax house price index: the indicator increased by 0.8% MoM and 1.6% YoY.
The upward trend continues, as evidenced by the upward reversal of Bollinger bands and the increase in the MACD histogram in the positive zone. Now the price has corrected to 1.2451 (Murrey level [6/8], Fibonacci correction 50.0%), from where it is preparing to start a new growth to 1.2573 (Murrey level [7/8]) and 1.2695 (Murrey level [8/8]). The key “bearish” level is the middle line of Bollinger bands around 1.2280, a breakdown of which will give the prospect of further decline to 1.2085 (Murrey level [3/8]), 1.2040 (Fibonacci correction 38.2%) but such a scenario is less likely at present.
Resistance levels: 1.2573, 1.2695. | Support levels: 1.2280, 1.2085, 1.2040.