GBP/USD accepts bids to prolong the week’s beginning drop from a one-month high. UK Claimant Count Change decreased to 19.7K in December, while the unemployment rate has remained steady for the last three months through November. Despite disadvantages related to a labor strike and inflation worries, cable prices rise due to the US dollar’s inability to follow the yields’ recovery. Before the important Wednesday, traders might amuse themselves with second-tier US data and risk triggers.
GBP/USD records a two-day losing run as it retraces to its intraday low after early-Tuesday UK employment data. Despite this, the GBP/USD pair fell to 1.2169 before rising to 1.2190 at the time of publication.
Early on Tuesday, the UK’s Office for National Statistics (ONS) issued its monthly employment report. The Claimant Count Change for December and the Unemployment Rate for the three months ending in November were two of the most important statistics. Despite this, the change in the number of claimants was 19.7K rather than 30.5K, and the unemployment rate remained at 3.7%.
In addition to the contradictory statistics, the UK labor strikes and Bank of England (BoE) Governor Andrew Bailey’s pessimistic testimony also impact the GBP/USD exchange rate. In London, BoE’s Bailey testified against the Treasury Select Committee and predicted a sharp decline in inflation this year. However, Bailey of the BoE noted concerns about growth brought on by employee strikes.
Other factors that affect the risk profile include the market’s doubts about the Chinese growth figures, the absence of significant data or events, and recessionary worries. The same support the rise in US Treasury rates and drags down the S&P 500 Futures as it declines from their one-month high. However, the US Dollar Index (DXY) loses some of the previous day’s gains from the seven-month low.
According to Reuters, “two-thirds of private and public sector chief economists questioned by the WEF foresee a worldwide recession this year, with around 18% thinking it “very likely”—more than twice as many as in the previous study, which was conducted in September 2022.
Looking forward, the January NY Empire State Manufacturing Index, which is predicted to be -4.5 as opposed to -11.2 before, may amuse intraday traders when the markets resume being fully stocked. However, the UK Consumer Price Index (CPI) and the US Retail Sales for December will get most of the focus on Wednesday.
Technical Analysis
Along with the positive MACD signals and higher RSI, the GBP/USD pair’s ability to hold above the 100-day EMA level at 1.1940 gives investors optimism, although the rising momentum is difficult to achieve until it crosses a six-week-old horizontal barrier above 1.2345.