The labor market in the U.K. is expected to deteriorate further as economists are forecasting that jobless claims rose by 84,800 in February, which would be the most since 1991.
[B]Fundamental Outlook[/B]
The labor market in the U.K. is expected to deteriorate further as economists are forecasting that jobless claims rose by 84,800 in February, which would be the most since 1991. The jump in claims is expected to push the unemployment rate to 4.00% from 3.8% the month prior. Britain has lagged the U.S. every step of the current crisis and if the relation ship holds then we should continue to see mounting job losses which will weigh on domestic growth. A weak sterling has failed to spur demand for exports which is forcing companies to continue cutting costs. The lack of a source of growth for the economy may derail the Pound which has found recent support on the back of an improvement in the banking sector. Technical analysis is calling for further cable strength, but that may not happen before another turn lower which could be ignited by a dour employment report. However, a less than expected print would add to the bullish story and we could see the GBP/USD break above the 20-Day SAM at 1.4133 which has provided staunch resistance,
[B]Technical Outlook [/B]
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A B wave low is in place for the GBPUSD. Price is testing the top side of the channel that contains the B wave. Expect a break higher as long as price is above 1.3887. Coming below there would give scope to a test of last week’s low at 1.3653. The minimum objective is above 1.50 (wave B origin).
For More Technical Analysis Visit the Daily Technical Report
[I]To discuss this report contact John Rivera, Currency Analyst: [email protected][/I]
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