Comparing the estimates for January to March 2015 with those for October to December 2014, the employment rate continued to rise and unemployment rate continued to fall. The proportion of the economically active population who were unemployed (the unemployment rate) was 5.5%, lower than 5.7% for October to December 2014 and 6.8% for a year earlier. In the period from January to March 2015, earnings in Great Britain increased by 1.9% including bonuses and by 2.2% compared with the previous year.
After election, the pound rose more than 4% against USD. The soft US data have been putting pressure on the USD in the recent months. The strength in the pound made the BoE to change its inflation forecast. The BoE downgraded the inflation growth forecast through 2017. We think the GBP is likely to rally in the near term.
Technical view: The cable moved above a 5-month high. A couple of facts have been supporting the pound in moving higher. The cable made a high at 1.5769. Today at the Asian session, the pound is trading at 1.5737 compared to 1.5746 Wednesday's closing against USD. In the four-hour chart, higher highs and higher lows formation are expanding. At yesterday's session we recommended fresh buying above 1.5715 (like 1.5830, 1.5860, 1.5900, and finally 1.5975). The cable made a high at 1.5769. In the daily chart, the cable managed to close all the moving averages at all-time intervals.
Key support: 200Dsma 1.5625 200Dema 1.5540.
Intraday view: We expect profit booking at 1.5800/1.5830 and re-test towards the support at 1.5560. We expect a near-term top to be placed in this week. In the four-hour chart, negative divergence remains in play. We expect the cable to test the levels of 1.5550/1.5500.In the hourly chart, the price has been consolidating for 8 long hours between 1.5728 and 1.5754. For an intraday view safe buying is seen above 1.5770 with targets at 1.5800 and 1.5830. We recommend selling below 1.5720 with targets at 1.5700 and 1.5660.
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