The pound continues to benefit from the weakness of the US currency, this morning the GBP / USD pair still reached the cherished goal at 1.40. It happened in essence in the absence of any important news. The really important events for the British currency should occur tomorrow, when data on the labor market will be published. Particular attention is likely to be paid to market participants by changing the size of the average wage in the country, and after last month’s convincing growth, the current report may be significantly worse than expected, which may serve as a signal for the development of corrective movement in the GBP / USD pair. In the meantime, the growth of the GBP / USD currency pair is fully based on the weakness of the dollar, which received additional pressure after the government’s temporary suspension.
Now, after reaching the level of 1.40, the GBP / USD pair has begun to be adjusted, because, firstly, the US dollar added to the price amid a positive vote in the Senate to extend government funding for another three weeks, and secondly, against the backdrop of profit taking open long positions at a fairly attractive level of 1.40.
Accordingly, today and tomorrow we can witness the development of a correctional wave for this currency pair based on the factors mentioned above, as well as on moderately negative data on the US labor market, which we will probably see tomorrow.
Graphic confirmation of the development of corrective movement, we have not yet received. The pair broke through the local resistance at 1.3940 and is now trying to gain a foothold above it, which, if successful, will be a signal for the continuation of the uptrend. While the price is in the range 1.3940-1.40, which may remain relevant for today. Only after the price returns below the level of 1.3940 will we receive the first signal of weakness of buyers and a possible beginning of a downward correction with the target at 1.3755.
Review prepared by Fort Financial Services analytical department. Follow our publications!