The GBPUSD pair has experienced a downward trajectory against the US Dollar for the past seven days, raising questions about the prevailing market sentiment. Today, traders eagerly await the release of the US Non-Farm Payroll (NFP) data, with economists anticipating growth in the job market, expecting figures around 180K compared to the previous 150K.
In addition to the NFP, another crucial economic indicator is the US Unemployment Rate, where economists foresee no change at the current rate of 3.9%. As the market gears up for these impactful releases, the recent decline in GBPUSD is viewed more as a bullish correction within the broader context.
Chart patterns often emerge during corrective phases, and currently, GBPUSD is forming a falling wedge chart pattern, indicative of a bullish continuation pattern. Confirmation of this pattern awaits a decisive break above the upper trend line. Another factor supporting this potential bullish continuation is the likelihood of mixed outcomes in today's economic news releases, where at least one high-impact news could come in lower than expectations. Notably, GBPUSD found support near the 61.8% Fibonacci retracement level, adding a technical layer to the analysis.
A piercing candlestick pattern materialized around $1.2546, potentially marking the bottom of the falling wedge chart pattern. A break below this swing low could expose GBPUSD to further weakness, targeting the Fibonacci level at 76.3% ($1.2516).
However, this chart pattern's validity hinges on the outcome of today's key economic news. If these releases meet expectations, the falling wedge pattern might be invalidated.
Technical indicators add nuances to the analysis. The RSI has not breached above the 60% level, signaling the persistence of a bearish trend. The MACD histogram and signal line briefly crossed above the 0 level during yesterday's New York trading session, but bearish pressure in today's European trading session brought it back under the 0 level.
Examining the EMA 50 & EMA 200, bearish momentum is gaining strength since today's European trading session open. Both EMA 50 & EMA 200 are expanding/separating, indicating an increasing bearish momentum.
In conclusion, GBPUSD remains in a bearish stance until the release of the NFP and Unemployment Rate data later today. Traders are advised to stay vigilant as these releases have the potential to sway market sentiment and dictate the pair's near-term trajectory.
Forecast 180k vs Previous 150k
Forecast 3.9% vs Previous 3.9%
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