GBP/USD shrugs off upbeat UK jobs data

GBP/USD remains weak sub 1.3650 at multi day lows despite better than forecast UK employment (FXB, UUP).

The UK unemployment rate beat estimates rising to 5% in the 3 months to November, up from 4.9% as redundancies reached a record high. Even so, the claimant count for December rose by just 7k, well short of the 35k forecast. Average wages rose 3.6% vs 2.9% forecast.

Meanwhile the US Dollar is advancing versus major peers supported by its safe haven properties amid concerns over a delay for Biden’s $1.9 trillion stimulus. Attention will remain on US event / data risks. The FOMC is due to announce its monetary policy decision tomorrow.

GBP/USD technical analysis

GBP/USD trades within and ascending channel patter dating back to early November. However, on the 4 hour chart the picture is turning more bearish as the price continues to ease back from 1.3750 reached last week.  

Today’s sell off has seen the price fall below the 50 sma and it is currently testing the 100 sma on the four hour chart 1.3620. The RSI is supportive of further weakness, below 50 but still above oversold territory. A break through this level could see GBP/USD test the lower band of the ascending channel at 1.3580 prior to 1.3520 a break through which negates the longer term up trend.

On the flipside should 100 sma hold at 1.3620 a move back towards 1.37 round number and 1.3750 multi year high could be on the cards.

Dax picks up off lows

The Dax  has pick up off session lows and attempts a recovery on Tuesday. Concerns that President Biden faces possible bipartisan resistance to his $1.9 trillion stimulus plan dragged on risk appetite sending stocks lower on the open. Although the mood is showing signs of improving..

Furthermore, more lockdowns in Europe, and concerns over vaccine distribution as Germany raises questions over the effectiveness of the AstaZeneca (AZN) jab in people over 65 are adding to the risk off mood.

There is no Eurozone data due today. Attention this week will be on the US earnings season with of Johnson & Johnson (JNJ), Verizon (VZ), American Express (AXP), General Electric (GE), Apple (AAPL), Tesla (TSLA), Facebook (FB) & Microsoft (MSFT) set to report.

Dax technical analysis

The Dax has been trading in an ascending channel pattern since early November. It trades above its 50 & 100 sma on the daily chart indicting an established bullish trend. However, the price is testing the lower band of the channel at 13630 and the RSI is in bearish territory, below 50 and pointing southwards.

A break through this level of 13630 and the subsequent 50 sma at 13550 would negate the current bullish trend and could see the price extend losses falling back towards 13040 the 100 sma and the yearly low.

On the up-side, should 13630 hold, a resumption of the bullish trend could see the Dax retest 14137 the all time high reached 8th January could be on the cards.