FX.co ★ Hot forecast for GBP/USD on 10/08/2021

Despite a notable decline in the number of jobless claims in the United States, the market has not budged. But the number of initial calls decreased by 38,000 against the forecast of 16,000. The number of repeated requests, instead of decreasing by 21,000, decreased by 97,000. So the situation in the US labor market not only continues to improve, but is doing it even faster than expected. Given the extremely high importance of the labor market for determining the parameters of monetary policy, the rapid decline in the number of applications should have led to a noticeable rise in the dollar. But not this time, as the market froze in anticipation of the release of the report of the United States Department of Labor.

Number of re-claims for unemployment benefits (United States):

There is no doubt that the content of the report will give a start to a new wave of dollar growth, as all data on the labor market in recent days clearly indicate that its content will be slightly better than forecasted. At the same time, the forecasts themselves are quite optimistic. Thus, the unemployment rate should decrease from 5.2% to 5.1%, and 475,000 new jobs should be created outside agriculture. Most likely, the unemployment rate will drop to 5.0%, as this is indicated by a fairly strong growth in employment. So the scale of the dollar strengthening can be quite impressive.

Unemployment rate (United States):

The GBPUSD pair has completed the construction of the corrective move within the 1.3620/1.3650 resistance area. This led to a slowdown in the upward movement and a gradual increase in the volume of short positions.

The technical instrument RSI did not reach the overbought zone in the four-hour period. The indicator slowed down at the level of 65, and then returned to the line 50. The subsequent movement of the indicator did not have any critical changes.

Based on the daily period, a downward trend is observed, in the structure of which a correctional movement emerged in the period from September 30 to October 5. The recovery process with respect to correction is at an early stage.

Expectations and prospects:

It can be assumed that the downward cycle is still relevant in the market. Traders will play back the recent corrective move during the new trading week. A further increase in the volume of short positions is expected at the moment the price stays below 1.3530. This price move will open the way towards the support level of 1.3400.

Comprehensive indicator analysis gives a sell signal based on short-term and intraday periods due to the recovery process relative to the correction. The medium term is still focused on a downward cycle, signaling a sell.