GBP/USD Analysis:
UK Jobs Data and Inflation Figures Produce Opposite Effects
The UK jobs data released on Tuesday was welcomed and buoyed GBP/USD[4]. The figure of 84k new jobs beat expectations of 50k, while unemployment data showed a lower than expected figure, coming in at 4.8% vs 4.9%.
However, yesterday’s UK inflation data raised concerns, mainly around the pace of future inflation, as the UK enters the next stage of re-opening – which is likely to see increased travel and greater economic activity in previously restrained sectors particularly restaurants and pubs.
Next up on the calendar to round off this week is the Markit PMIs due to be released on Friday. For all market-moving data releases and events see the DailyFX Economic Calendar[5]
GBP/USD Technicals: Bearish Engulfing Candle Provides Basis for Brief Pullback
After the release of the UK inflation data and on the back of the FOMC[6] minutes, GBP/USD witnessed a modest sell-off just as the yearly highs were in sight. The appearance of a bearish engulfing candle on the daily chart suggests that the pullback may still have some room to move with the former resistance zone[7] of 1.4000 providing the next level of support. Bulls may look to this level to provide insight into a possible bullish continuation play, using the zone of support as a launchpad.
Learn what the bearish engulfing candlestick means for FX markets and how to identify it by reading our article: Trading with the Bearish Engulfing Candle[8]
Image: Bearish Engulfing
