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

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.

IEA cut its crude forecast by 2.5 million barrels per day in 2021

API data is due to be released later today. Expectations are for crude inventories to fall by 900,000 barrels the week to March 19.

Where next for crude oil prices?

WTI is extending losses for a second day and adding to steep losses from last week.

WTI crude oil trades below its 100 & 200 hma and also below its descending trendline dating back to the start of the month in a bearish signal.

A bearish MACD is also pointing towards further losses.

So far WTI has found support at the lower band of the bear flag. A break through this support could lead to a deeper 60.60 could lead to a deeper selloff through 58.00 round number and horizontal support March 19 towards 58.15 low March 18. A break through this level could open the door towards 54.00 January’s high.

Should support at 60.60 hold, any recovery would need to cross 100 hma at 62.00 before attempting a break above 63.70 the 200 hma. A move above resistance at 64.40 the 2 week descending trendline could see the buyers gain momentum.