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  • Market Insights  >  Trade Of The Day

13 November 2024,02:18

Trade Of The Day

Pound Drops as UK Unemployment Rate Rises

13 November 2024, 02:18

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Fundamental Analysis

* Jobless Surge: The pound has fallen against the dollar after disappointing employment figures from the UK. The Office for National Statistics (ONS) reported that the ILO Unemployment Rate rose to 4.3% in the three months ending in August, up from 4.0% and surpassing the expected 4.1%. During this period, UK employers added 219,000 jobs, a sharp decline from the previous 373,000. The Bank of England (BoE) has been paying close attention to wage growth, a major driver of inflation in the service sector, to inform its interest rate decisions. In response to the weaker data, traders are now slightly favoring another 25 basis point (bps) rate cut in the BoE’s December meeting. Last week, the BoE also lowered its key borrowing rate by 25 bps, signaling a cautious stance on further policy easing.

Technical Analysis

* Technical Breakout: GBPUSD was traded lower following prior breakout below the previous support level 1.27950. MACD which illustrate strong bearish momentum signal suggest the pair to likely further extend its losses.

* Resistance and Support: If the bearish momentum persists, there’s a strong likelihood that the price will potentially head towards the level 1.26700. Conversely, a potential reversal is also to be expected and the price could head back towards 1.27950.

Potential Risks

Looking ahead, investors will closely watch key U.S. economic data releases, including CPI, PPI, and Retail Sales this week for further direction and insights into economic momentum.

Learn more about how to navigate the prop trading landscape by checking out PU Xtrader’s trading blogs.

Monitoring

Stay updated on US and UK data, central bank updates and any shifts in the US Dollar’s strength by following PU Xtrader’s financial news page.

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