GBP/USD has risen to 1.4096 following today’s better-than-expected employment data. The unemployment claims came in at -20.0K compared to a forecast of 13.8K while the unemployment rate stood at 5.1% meeting the analysts’ expectations. Currently, the pair is trading 0.16% higher with immediate support levels at 1.4055 and 1.4028. The intraday resistance levels are at 1.4090 and 1.4123.
The pair had closed above 1.4000 on Monday pointing to a further rise which gained further momentum follow today’s employment data. However, on the intraday charts, the RSI has entered deep into the overbought zone which may prompt a small correction. On other technical indicators, the trend is strongly bullish. The SMA-14 is indicating support at 1.38705 while the SMA-50 is at 1.3679. The MACD is above zero line and has a bullish crossover. The pair is also above the mid-Bollinger band and moving towards the upper resistance line. Although the price pattern is bullish, a correction is likely to take place which may bring a buying opportunity. A decent intraday buying entry would be on a small correction towards 1.4030. The target profit for this trade would be 50 to 60 pips with a stop-loss at or slightly below 1.3990.
If the bulls can manage another intraday closing above 1.4050 the uptrend would further accelerate however, the upper trend line resistance area (1.4138) would be a major hurdle and only a breakout above that would ensure a further higher move. On the downside, if at all a correction extends below 1.3940 the pair might enter into a consolidation phase before once again setting a clear direction.
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