Two Trades To Watch: GBP/USD, WTI Crude Oil - Tuesday, Mar. 23

GBP/USD remains under pressure after a mixed jobs report. WTI crude oil pressurized amid rising COVID cases in Europe.

Charts (1)

GBP/USD remains under pressure after mixed jobs data

UK unemployment for the 3 month to January declined back to 5% after ticking up to 5.1% December. This was below the 5.2% expected.

However, the claimant count for February, which is considered to offer a more accurate insight into the labor market jumped 86.6K against a 20.8k fall in January.

Average earnings in the 3 months to January rose to 4.8%, up from 4.7% but missed forecasts of 4.9%.

BoE Governor Andrew Bailey is due to speak later.

The US economic outlook underpins the US Dollar. Fed Powell & Janet Yellen’s prepared remarks for testimony before Congress later today added to upbeat economic outlook.

A slightly risk off mood is supporting the safe haven US Dollar.

Where next for GBP/USD?

GBP/USD failed to break above 1.40 on two occasion over the past two weeks forming a bearish double top pattern seen on the 4 hour chart. However, the selloff following the double top has lacked strength and although the pair has trended lower for 4 days, it has failed to break through 1.38.

A move below the 1.38 level, which has offered support several time across the month could see the bears drive GBP/USD  towards support at 1.3750 resistance (from later February) turned support. A break through here could open the door to 1.37.

Any meaningful recovery in GBP/USD would need to break above 1.39 the confluence of the 100 & 200 sma on 4 hour chart in order to aim for 1.40 the psychological level and resistance March 18, 12 & 4. Only a convincing break above here could see the bulls (FXB, UUP).

Oil under pressure amid rising COVID cases in Europe

Oil remains depressed for a second straight session amid concerns that rising COVID cases in Europe will hit demand.

Europe is seeing a third wave of COVID sweep across the region whilst the vaccine rollout is slow.

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