Gbpusd drops 1.15% amid strengthening US labor market

GBPUSD Analysis

Performance after Thursday
Period	Pct	Chg	Momentum
Thursday	-1.15%	-143.6 Pips
Week to-date	-1.61%	-201.9 Pips
January	-1.38%	-172.6 Pips

Upcoming key events (London Time)

No major events for the day.

What happened lately

In the United States, the Department of Labor reported that the Initial Unemployment Insurance Claims decreased to 211,000 in the week ending December 28. This figure shows an improvement from the previous week’s revised figure of 220,000, down from the initially reported 219,000. The decline in unemployment claims suggests a strengthening labor market, as fewer individuals are seeking unemployment benefits. This might indicate that employers are retaining workers at a higher rate, reflecting confidence in the current economic climate and possibly spurring positive economic activity.

Regarding the GBPUSD currency pair, the reported improvement in the U.S. labor market would typically enhance confidence in the U.S. economy, thereby strengthening the U.S. dollar. This increase in the dollar’s strength could be a contributing factor to the recent decrease in the GBPUSD rate, which fell by 1.15% to a rate of 1.23769 on Thursday. With the stronger dollar and reduced unemployment claims, investor sentiment may shift further in favor of the U.S. currency, potentially continuing to apply downward pressure on the GBPUSD exchange rate. However, as no major events are anticipated for the day, any further significant movements in the currency pair will likely depend on broader economic data and market sentiment.

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What can we expect from GBPUSD today?

GBPUSD on Thursday dropped -1.15% to 1.23769. Price is below 9-Day EMA while Stochastic is falling.

Updated daily direction for GBPUSD looks bearish as the pair posted lower in Thursday trading session.

Looking ahead for the day, immediate support level is at S1 1.23059 with break below could see further selling pressure towards S2 at 1.22348. To the upside, with the current momentum bearish, we prefer to look at breakout of the recent daily high of 1.25404 as a potential indicator of buying interest. Failure to break the resistance level would continue to echo bearish sentiment. A close below 1.23521 would indicate selling pressure.

For the week to-date, take note that GBPUSD is bearish as the pair posted lower by -1.61%.

Key levels to watch out:

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