- UK’s unemployment rate held at 3.8%, surprising investors.
- The upbeat jobs report indicates that inflation has not yet hit the labor market.
- The Bank of England might be confident enough to raise rates further in the coming meetings.
Today’s GBP/USD price analysis is bullish as investors react to the positive UK jobs report showing significant employment change.
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The employment change in May came in higher than the expected 170K at 296K, surprising investors. On the other hand, the unemployment rate held at 3.8% when investors expected an increase of 0.1%. This is a sign that the rising prices have not yet hit the labor market.
Strong hiring in the UK might give the Bank of England the confidence to raise rates further in the coming months. The BoE has said it is ready to act aggressively if it sees that the recent rise in inflation – expected to hit 9.3% in the 12 months to June in figures due on Wednesday – is entrenched in Britain’s economy.
The search for the next Prime Minister continues in the UK, with candidates now down to 4. There is hope that political order will return soon. The pound is also getting support from the weakening dollar.
GBP/USD key events today
GBP/USD investors will pay attention to the US housing sector when the building permits report is released later today. This report measures the change in the number of new building permits issued by the government and indicates demand in the housing market. Investors expect the permits to drop in June from 1.695M to 1.650M.
GBP/USD technical price analysis: Bullish momentum gaining to retest 1.20307
Looking at the 4-hour chart, the price is increasing after a short pullback. It is trading above the 30-SMA, showing bulls are in control. RSI is trading above 50, favoring bullish momentum.
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The price might retest yesterday’s resistance at 1.20307, where it might break above or bounce lower. Given the current bullish momentum, it is likely that the price will make a new high above yesterday’s high. If the price breaks above 1.20307, the next hurdle will be 1.21598. This bullish trend will continue if the price keeps trading above the 30-SMA and the RSI stays above 50.
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Saqib Iqbal
