GBP/USD has slightly recovered on better than expected UK economy number numbers. The data released earlier today showed the unemployment numbers came in at 73.7k compared to a forecast of 99.5k. The Average Earning Index also came in better at -1.0% compared to a forecast of -1.3% and a previous of -1.2%. The pair is currently trading at 1.2883. The 1.2900 level is acting as a major resistance level while other resistances are present at 1.2930 and 1.2948 levels. The near term support is at 1.12840 other supports are at 1.2820 and 1.28200.

The RSI is still below the neutral zone but appears to be in line with today’s move. A Fibonacci Retracement drawn from a swing low at 1.1400 to the recent swing high at 1.3446 shows the support area (38.2% retracement) at 1.2671. Both the longer period (SMA-50) and shorter period  (SMA-20) are currently indicating resistance areas at 1.2978 and 1.3130 respectively. However, the current price is near the moderately strong support and the price pattern on the 4-hourly chart is also bullish and favors long entries. However, a long entry is favored on a dip. A decent intraday buying level would be at or near 1.2845 with a target of 50 to 60 pips. A stop-loss for this trade would be just above the 1.2800 support level.

Bulls would need an intraday closing above 1.2900 to take the price further higher. Closing below 1.2800 would raise the possibility of testing the Fibonacci support level of 1.2671.

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By LCMS Traders FX Analysis Team

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