The UK final for the manufacturing sector failed to meet the forecast. Nevertheless, the indicator showed a rise to 58.1 points from 57.8 points, instead of increasing to 58.2 points. The difference is insignificant and it should not have influenced the market. However, during the European session, the was gaining in value.
However, the British pound reversed just after the US published its . Analysts had foreseen a jump of 525,000, whereas employment climbed by 534,000. The indicator showed a considerable rise. Judging by the population growth rates and economic activity, employment should advance by 150,000 every month to support a stable .
In addition, since the beginning of the year, employment has been showing higher than expected growth. Of course, we can say that the labor market is still recovering after last year’s slump, but the unemployment rate has long been below the Fed’s target. That is why the labor market is reaching new highs, rather than continuing to recover. Against this background, the surged.
Being impressed by such figures, investors ignored the US report. At the same time, the indicator slid to 58.3 points from 58.4 points, instead of climbing to 59.1 points. The US employment report overshadowed the PMI data.
Today, the market is likely to remain stagnant since the US may publish mixed data on . Thus, the number of first-time claims may advance by 46,000, whereas the number of may decline by 49,000. The figures will offset each other. That is why investors are likely to pay zero attention to it. There is a possibility that the US dollar will continue the uptrend that began at the end of the spring.
The pound/dollar pair once again dropped from the resistance level of 1.3350, thus boosting the volume of short positions. As a result, the price fixed below 1.3290, thus proving the bearish market sentiment.
On the four-hour and daily charts, the RSI technical instrument has been moving between the lines of 30 and 50 for the ninth day in a row. This proves that market participants prefer opening sell positions.
On the daily chart, the pound sterling is gradually falling. In the last six months, the currency has significantly lost value.
If the price fixes below 1.3290 on the four-hour chart, it is highly likely to slide deeper. As a result, the pound/dollar pair may touch a new local low of 2021.
The alternative scenario will become possible if the price resumes hovering within the sideways channel of 1.3290/1.3350.
In terms of the complex indicator analysis, we see that technical indicators are signaling sell opportunities on the short-term and intraday periods since the price is below 1.3290.
On the short-term chart, technical indicators are also providing sell signals.
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