FX.co ★ GBP/USD. June 13. Unemployment data unexpectedly turned out to be positive

On the hourly chart, the GBP/USD pair experienced a decline toward the corrective level of 23.6% (1.2470) on Monday. Still, on Tuesday, it started rising again and closed above the level of 1.2546, which allows it to anticipate growth towards the next level at 1.2623. The pair's consolidation below the level of 1.2546 would favor the US currency and a resumption of the decline toward the Fibonacci level of 23.6% (1.2470). The ascending trendline continues to characterize trader sentiment as "bullish."

On Monday, there was no significant news for the British pound and the US dollar. However, this did not prevent traders from actively selling, despite the current advantage held by the bulls. But on Tuesday morning, three reports were released in the UK, which, to cut a long story short, supported the bulls. The unemployment rate in the UK decreased to 3.8% in April, while traders expected an increase to 4.0%. The number of unemployment benefits claims in May decreased by 13.6 thousand, although traders expected an increase of 21.4 thousand. The average earnings level increased by 6.5%, against the forecast of 6.1%. The first two reports can be considered positive for the British pound, while the last one can be considered neutral.

The decrease in the number of unemployment benefits claims and the unemployment rate is undoubtedly a positive factor that allows the Bank of England to feel more at ease regarding the monetary policy issue. A stronger wage increase will negatively impact inflation because the more money people have, the more they spend, and prices also rise faster. Thus, inflation receives support, and the Bank of England will have to raise interest rates more aggressively, which is also good for the pound. The question is how much room for maneuvering the Bank of England has. How much further can it tighten its policy? In the second half of the day, the US inflation rate for May will be released, which could sharply decrease. This report could also support bullish traders.

On the 4-hour chart, the pair has consolidated above the triangle, which allows for an expectation of further growth toward the Fibonacci level of 100.0% (1.2674). The "bearish" divergence on the MACD indicator did occur, and the pair experienced a decline afterward. However, at the moment, the upward momentum has resumed, and we can already forget about this divergence. The new "bullish" divergence on the CCI indicator has brought the British pound back to the upside.

Commitments of Traders (COT) report:

The sentiment of the "non-commercial" category of traders has become slightly less "bullish" in the last reporting week. The number of long contracts held by speculators decreased by 5,257 units, while the number of short contracts decreased by 4,506. The overall sentiment of major players remains predominantly "bullish," but the number of long and short contracts is currently almost equal, at 65,000 and 52,000, respectively. The British pound has good prospects for further growth, and the current information background supports it more than the dollar. However, I do not expect a significant surge in the pound sterling in the coming months. Next week's results of the Bank of England meeting will help clarify the pound's prospects.

News calendar for the US and UK:

UK - Average Earnings Including Bonuses (06:00 UTC).

UK - Change in Unemployment Claims (06:00 UTC).

UK - Unemployment Rate (06:00 UTC).

US - Consumer Price Index (CPI) (12:30 UTC).

On Tuesday, the economic events calendar contains many important entries, but almost all have already become known to traders. Only the US inflation remains. The impact of the information background on trader sentiment today will be significant.

Forecast for GBP/USD and trader advice:

New sales of the British pound can be initiated in case of a close below the level of 1.2546 on the hourly chart, with targets at 1.2470 and the trendline. Purchases of the British pound were possible with a close above the level of 1.2546, targeting 1.2623.