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Having been burdened by Brexit worries for a long time, the pound currently is witnessing a recovery as the results of the latest poll showed that the “Remain” campaign has taken the lead ahead of the British referendum on June 23.
In addition, data published earlier today by the Office for National Statistics contributed to boosting the sterling. According to today’s report, the UK Labor market still stayed firm despite an economic slowdown. The jobless rate for quarter ending in March remained unchanged at 5.1% since the beginning of this year. This marked the lowest level in more than a decade. Meanwhile, the employment rate posed a record high of 74.2% in the first quarter of 2016 as number of people in work advanced by 44,000 to a total of 31.6 million.
On a yearly basis, the average total pay for employees (including bonuses) in Great Britain rose by 2.0% to £499 per week for the three months ending in March, little changed from an increase of 1.9% in the previous three months to February.
Today, BOE Chief Economist Andy Haldane is scheduled to talk about UK benchmark rates and some clues regarding the next monetary move policy are awaited.
Yesterday, the Bureau of Labor Statistics reported that US inflation was on its way to climb toward the FED’ s target rate. Consumer price index (CPI) started the second quarter of 2016 with the largest gain in over three years. The latest data (seasonally adjusted) came in with an advance of 0.4% in April, compared with a rise of 0.1% in the month prior. Economists had forecast that the index would inch up 0.3% last month. After eliminating the costs of food and energy, the so-called CPI increased 0.2%. In March, the reading was 0.1%.
Currently, markets are focusing on the minutes from the FOMC’s April Meeting. Hints from several FED officials’ comments last week, suggest that an interest rate hike is likely to be carried out in June or July. As a result, the dollar index DXY, which tracks greenback’s strength against its peers, has continued moving upwards today. The index stands at 94.90, about 0.35% higher than the last close.
Fig. GBPUSD D1 Technical Chart
After surging to a level of 1.47689, a four-month high on May 03, GBPUSD had slid back and had moved gingerly between levels 23.6% and 50.0% of Fibonacci retracement. However, the price currently is break the level 23.6% of Fibonacci retracement, hinting a bounce back. A green arrow has appeared under the price chart since April 21, suggesting a long position. The price is expected to fly higher.
Buy at 1.45902, Stop loss at 1.45294, Take profit at 1.47152