Today's review of the pound/dollar currency pair will begin with Friday's data on the US labor market, the reaction to this most important market event, and the GBP/USD trading instrument, after which I will proceed to the technical analysis of this interesting and much-loved pair. So, last Friday, data on the US labor market were published, which are traditionally considered one of the most important macroeconomic indicators and cause a violent reaction in the market. Moreover, in the context of the beginning of the process of tightening the Federal Reserve of its monetary policy, American labor reports should, in theory, have attracted the special attention of investors. However, Nonfarm Payrolls did not interest the market. Such a frankly weak reaction of bidders to the most important macroeconomic reports from the United States is not immediately remembered. So what's the point here?
First, investors have not been paying much attention to fundamental events for a long time, often simply ignoring them. Second, the good state of the American economy in general and the labor market, in particular, has long been known, which means that it is more embedded in the price of the US dollar. Third, the labor market data for March came out mixed, which could cause some confusion in the ranks of traders. If unemployment decreased more than the forecast value of 3.7% and amounted to 3.6%, then non-farms were below the forecast value of 492 thousand and showed an increase of only 431 thousand. However, this is not such a bad indicator, especially since the February value was revised upward. Regarding the average hourly wages, we can state a complete coincidence with the forecast value, which provided for their growth by 0.4%. In today's euro/dollar article, I have already characterized the February labor reports from the United States as neutral-positive and am not inclined to change my assessment in this article.
Let's continue to understand why the US dollar has been in such weak demand lately. We all remember that earlier the demand for the US currency as a protective asset was supported by the emergence of new waves of the COVID-19 pandemic, but the coronavirus did not appear yesterday, and we have been living with it for the third year now. It turns out that this topic, as well as the events in Ukraine, are also taken into account in the price of the US dollar as a safe-haven currency. Thus, we can conclude that the drivers for a stable and decent enough strengthening of the "American" have dried up. By the way, this is eloquently evidenced by the technical picture for most dollar pairs. So let's start the technical analysis of GBP/USD and first turn our attention to the weekly price chart.
Weekly
As you can see, the attempts of the bears to lower the pound quote to the most important historical and psychological level of 1.3000 were blocked by the strong technical level of 1.3050. As a result of the rebound from this mark, the weekly candle had a rather big lower shadow. I always recommend paying attention to the shadows of candles, especially on older timeframes, however, they often give excellent signals inside the day to open positions. As for the weekly results, I advise you to take into account their closing price, which turned out to be higher than another landmark technical mark of 1.3100. In general, the technical picture on the weekly chart, despite the final decline of the pair, does not give a clear idea of the subsequent direction of the quote.
Daily
Looking at the daily chart, in principle, it would be possible to make the same summary as on the "week". The frequent appearance of candles of the Doji variety, as well as trading in a relatively narrow sideways range, clearly demonstrate that the market now does not quite understand or does not know which way to move. In such a situation, it is always difficult to give any specific trading recommendations. No, you can write anything you want, but I do not want, dear friends, to mislead you. Based on all of the above, in today's article, I will refrain from clear trading recommendations, while noting the probability of GBP/USD movement in both directions. Here, as the market pleases. But in tomorrow's review of the pound/dollar pair, smaller time intervals will be considered, where we will try to find technically sound options for opening positions on GBP/USD.