Cable is holding above within narrow range of the previous day, limited by 10SMA (1.2894) and 30SMA (1.2948) ahead of today’s key event, release of UK jobs data.
Two-day recovery from 1.2772 low was capped by pivotal Fibo barrier at 1.2942 (38.2% of 1.3217/1.2772), reinforced by 30SMA, as fresh bulls lost momentum.
Daily studies are in mixed mode and lack direction, with focus on data that could provide fresh signals.
UK unemployment is expected to remain unchanged at 4%, jobless claims are expected to significantly drop in Jan 12.3K f/c vs 20.8K prev), while employment is expected to rise further (151K f/c vs previous nearly doubled figure at 141K that hit the highest on record)
The most significant release – average earnings – is forecasted at 3.5% in Dec vs 3.4% prev (the highest pay growth in nine years).
Strong jobs numbers contrast other economic indicators which point to economic slowdown ahead of Brexit and could boost sterling on better than expected releases.
Bullish scenario on better than expected earnings would boost pound towards converged 20/200SMA’s (1.2988/1.3006).
Sideways-moving 10SMA offers immediate support at 1.2893, while stronger bearish acceleration through 100SMA (1.2874) would weaken near-term structure and risk further weakness.
Res: 1.2942, 1.2988, 1.3006, 1.3047
Sup: 1.2893, 1.2874, 1.2818, 1.2772
