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Claimant Count Change, or UK jobless claims for April, dropped by 13.7K – a big surprise. A rise of 4.9K was expected. The unemployment rate for March was also better than expected, dropping from 8.3% to 8.2%.

GBP/USD is now moving up, continuing the positive trend.

It trades at 1.5982 at the time of writing. 1.60 looms above. Update: the gains are limited. The European troubles seem more powerful than the domestic improvement. Update 2: The happiness didn’t last too long – cable is under 1.5960 once again.

GBP USD Recovering After Good Employment Data May 16 2012
GBP USD Recovering - Click image to enlarge

This is the first month of drops in UK jobless claims since February 2011. The drop in the unemployment rate to 8.2% is the lowest since it was at 8.1% in August 2011.

Average Earnings Index is the only disappointment, with a small rise of 0.6%, lower than 1.1% that was expected. but this is a second-tier indicator.

GBP/USD lost the all important round support line of 1.60 yesterday, as the US dollar stormed across the board. It fell as low as 1.5934 earlier in the day but managed to recover towards the publication, trading around 1.5970.

Higher resistance is at 1.6060. Significant support is at 1.58. For more, see the Pound USD forecast.