On the hourly chart, the GBP/USD pair experienced an upward movement on Monday, reaching the corrective level of 38.2% at 1.2565 before rebounding from it. This reversal in favor of the US dollar indicates a potential decline towards the level of 1.2517. If the pair consolidates above 1.2565, the likelihood of further growth towards the next level at 1.2611 increases.
Regarding the wave situation, the last upward wave concluded on May 3rd without surpassing the previous wave's peak. The new downward wave is likely complete without breaking the low from April 22nd. Therefore, the trend for the GBP/USD pair remains "bearish," albeit with one doubtful sign of its completion. Confirmation of the end of the "bearish" trend would require the new upward wave, starting on May 9th, to surpass the peak from May 3rd. However, if this new upward wave turns out to be weak, doubts about the bulls' ability to continue attacking will persist.
In Britain, the unemployment report released this morning showed an increase to 4.3% in March, marking the third consecutive month of rising unemployment. While this is concerning for the British economy, the British pound and its sellers did not react to the negative report. The number of unemployed decreased by 85,000 in April, much better than traders' expectations. This allowed the pound to maintain its position despite the rise in unemployment in March.
Additionally, the latest wage report showed a value of 5.7%, significantly higher than forecasts. This suggests that salaries are increasing faster than expected, potentially impacting the slowdown in headline and core inflation. It could allow the Bank of England to maintain its "restrictive" policy longer, supporting the British pound.
On the 4-hour chart, the pair bounced from the level of 1.2450, indicating a continuation of the upward movement towards the level of 1.2620. Although trader activity remains low, the pound may continue to rise as it has exited the descending trend channel.
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