- The GBP/USD collapses below 1,3600 while the initial unemployment subsidy applications in the US fall to 227K, below the forecasts and the previous data.
- Fed officials warn that tariffs and weak dollar could feed inflation.
- The United Kingdom data is still scarce; Operators expect GDP figures and industrial production.
The pound sterling quoted with losses of 0.27% on Thursday after an employment report in the United States (USA) revealed that the labor market is solid, reducing the possibility of a rate cut by the Federal Reserve at the July meeting. At the time of writing, the GBP/USD quotes at 1,3550, having reached a maximum of 1,3619.
La Libra falls to 1,3550 while solid unemployment subsidy requests affect dovish bets, the United Kingdom macroeconomic panorama is still moderate
The cable has so far dropped more than 0.65% during the week, in the middle of a scarce agenda in the United Kingdom. The US Department of Labor (DOL) reported that the initial unemployment subsidy applications for the week on July 5 decreased to 227,000 from 232,000 the previous week, and were below the 235,000 scheduled.
Although the data suggest some strength in the labor market, continuous applications increased to its highest level in three and a half years, reaching 1.97 million in the previous week.
Recently, the president of the FED, Jerome Powell, said that in the current environment of low hiring and dismissals, any increase in layoffs could make the unemployment rate increase rapidly.
Meanwhile, the president of the Fed of St. Louis, Alberto Musalem, said that the economy is in a good place and that the labor market is in or near the full employment. He added that the risks on inflation are inclined up due to tariffs, whose effect has not been seen, and a weakened US dollar could contribute to inflation.
In the future, the economic agenda will feature Fed speakers, headed by Governor Christopher Waller and the president of the Fed of San Francisco, Mary Daly. On the other side of the Atlantic, the United Kingdom agenda will reveal figures of the Gross Domestic Product (GDP) and industrial production and manufacturing.
GBP/USD price forecast: technical perspective
The daily GBP/USD graph still has a bullish bias, although it faces a strong resistance in the 20 -day SMA in 1,3592. Once the pair fell below the latter, the possibility of challenging the 1,3500 figure before the 50 -day SMA in 1,3487 was opened.
However, the ongoing setback seems to be fading, although the relative force index (RSI) became bassist, but still does not break the level of 40. If it is exceeded, it would point out that the vendors are decisively exceeding buyers.
On the positive side, a 1,3600 recovery would open the way to try the maximum of the current week of 1,3657.
LIBRA ESTERLINA PRICE THIS WEEK
The lower table shows the percentage of sterling pound (GBP) compared to the main currencies this week. Libra sterling was the strongest currency against the Japanese and in Japanese.
| USD | EUR | GBP | JPY | CAD | Aud | NZD | CHF | |
|---|---|---|---|---|---|---|---|---|
| USD | 0.86% | 0.68% | 1.63% | 0.67% | -0.02% | 0.86% | 0.52% | |
| EUR | -0.86% | -0.16% | 0.51% | -0.22% | -0.81% | -0.00% | -0.36% | |
| GBP | -0.68% | 0.16% | 0.66% | -0.03% | -0.64% | 0.17% | -0.31% | |
| JPY | -1.63% | -0.51% | -0.66% | -0.71% | -1.40% | -0.52% | -1.02% | |
| CAD | -0.67% | 0.22% | 0.03% | 0.71% | -0.66% | 0.21% | -0.28% | |
| Aud | 0.02% | 0.81% | 0.64% | 1.40% | 0.66% | 0.92% | 0.35% | |
| NZD | -0.86% | 0.00% | -0.17% | 0.52% | -0.21% | -0.92% | -0.48% | |
| CHF | -0.52% | 0.36% | 0.31% | 1.02% | 0.28% | -0.35% | 0.48% |
The heat map shows the percentage changes of the main currencies. The base currency is selected from the left column, while the contribution currency is selected in the upper row. For example, if you choose the sterling pound from the left column and move along the horizontal line to the US dollar, the percentage change shown in the box will represent the GBP (base)/USD (quotation).
Source: Fx Street
I am Joshua Winder, a senior-level journalist and editor at World Stock Market. I specialize in covering news related to the stock market and economic trends. With more than 8 years of experience in this field, I have become an expert in financial reporting.
