GBP/USD holds mild gains post jobs data. DAX rises on diplomacy hopes for Russia- Ukraine, ZEW economic sentiment data due.

GBP/USD holds mild gains post jobs data

GBP/USD trades marginally higher following UK jobs data. Even though Omicron was spreading rapidly in December and January, the labor market remained buoyant.

Unemployment held steady at 4.1%, as expected, Uk employers added 108k payrolls and the claimant count dropped by 31. k. However, job vacancies hit a record 1.298 million.

As employers attempted to fill the record number of vacancies, wages rose 3.9%. However, inflation was at 5.1% and according to the BoE is expected to keep rising to 7% by the spring, meaning that disposable incomes are coming under huge pressure.

Looking ahead US PPI is expected to fall to 9.1% YoY, down from 9.7% - could this be a sign that inflation has peaked?

Investors will continue to monitor Russia – Ukraine developments, which could drive safe have flowed to USD.

Where next for GBP/USD?

GBP/USD continues to trade in a sideways pattern, supported by the 100 sma on the downside at 1.35 and by 1.36 horizontal support on the upside. The RSI is also neutral at 50. Traders might loom for a breakout trade here.

Buyers could look for a move over 1.36 to open the door 1.3650 the February high. A break above here could expose the multi-month declining trendline.

Sellers could look for a move below the 100 sma at 1.35, exposing the 50 sma at 1.3470, and horizontal support at 1.3430 a level which has offered support or resistance on several occasions over the past few months.

(Click on image to enlarge)

DAX rises but the sentiment remains fragile over the Russia-Ukraine conflict

The DAX had a rough day yesterday closing 2% lower after hitting an 8-month low on fears that Russia could invade Ukraine this week.

Those fears have eased slightly after Russia indicated that it will continue talks with the US & NATO Optimism surrounding this final push of diplomacy is helping stocks higher

Headlines regarding Russia-Ukraine developments will be closely monitored, in addition to German ZEW economic sentiment data. Morale is expected to have improved to 53.5 in February, up from 51.7.

Eurozone GDP Q4 second estimate is expected to confirm 0.3% QoQ growth.

Where next for the DAX?

The DAX continues to trade below its multi-week descending trendline and its 50 and 100 sma although the RSI is attempting to head back towards 50.

Immediate resistance can be seen at 15350 the January 31 low ahead of 15500 the falling trendline resistance. It would take a move over 15650 the 50 and 100 sma  and 15750 the February high for buyers to change the bias to bullish

14800 is a key level for the DAX. The price dropped to this level yesterday but attracted buyers back in which lifted the price above here to close. A break below this level would be significant for sellers and could see the price head back down towards 14500 ad even 14000.

(Click on image to enlarge)