GBP/USD retreats on US Employment Report

<p>GBP/USD (daily chart shown below) began a tentative retreat on Friday after the US dollar gained on a better-than-expected employment report. The US Labor Department […]</p>

GBP/USD (daily chart shown below) began a tentative retreat on Friday after the US dollar gained on a better-than-expected employment report.

The US Labor Department reported that 257,000 jobs were created in the US during the month of January, easily beating consensus estimates of around 236,000.

Despite a slightly higher-than-expected unemployment rate of 5.7%, the positive jobs report prompted an immediate strengthening of the US dollar against most major currencies, including the British pound.

GBP/USD had reached a one-month high of 1.5350 earlier on Friday, which was the latest culmination of the recent rebound from the late January low of 1.4950.

2015-02-06-GBPUSD-daily-chart

 

Overall, GBP/USD continues to trade within a sharp bearish trend from the 1.7190 high in mid-July of last year.

Friday’s high before the US employment report reached up to strong resistance around a major downtrend resistance line as well as the key 50-day moving average.

With the current retreat, downside pressure should continue to prevail within the context of the strong downtrend. A continuation of the bearish trend on a turn back down below 1.5000 could once again begin to target lower support levels around 1.4800 and then 1.4500.

 

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