Wednesday, March 22, 2023

Sterling To Give Up Amid Upbeat U.S. Nonfarm Payrolls


Today all eyes are on the report by the US Department of Labor that could weaken the . First, the US is expected to edge down to 5.7% from 5.8%. Being viewed as the main criterion of current conditions in the labor market, the jobless rate indicates improvement. Besides, the labor force participation rate could have risen to 61.7% from 61.6%.

That means an increase in the economically active workforce. In fact, the unemployment rate actually declined to a larger degree in June. Second, the US economy could have added 570K jobs . In other words, the jobless rate is set to go down at a faster pace. For comparison, the nonfarm payrolls for May logged 492K new jobs. Third, could have grown to 2.1% from 2.0%. It turns out that the number of working Americans increased and their wages also rose.

As a result, the overall income expanded notably. In turn, experts reckon this will invigorate consumer activity which is seen as a driving force of the US economy. In view of all these factors, the US economy is obviously keeping healthy. So, a recovery is going on at full steam. This is certainly bullish for the unless the employment data is worse-than-expected.

US Nonfarm Payrolls

Yesterday GBP/USD crossed an important correctional level of 1.3785. So, the sterling fell to 1.3751 against the US dollar.

The market dynamic is getting more turbulent as the speculative interest is evident. The average volatility per 24 hours from June 28 to July 1 is measured at 72 pips.

Speaking about the ongoing price move, the pair is trading firmly below 1.3785 that could eventually assure traders to step up short positions.

In case the bears continue pushing the price down, GBP/USD could make the next downward move to 1.3700-1.3675.

This scenario suggests an extended downward correction from the top of the medium-term trend. Analysts do not rule out a reversal of the overall uptrend.
In terms of complex indicator analysis, we see that all technical tools are generating a sell signal on the back of the vigorous downward move.

InstaForex Group

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