With the UK unemployment rate at 4.0%, investors should watch the pound’s direction

With the UK unemployment rate at 4.0%, investors should keep an eye on the pound’s direction

13.09.2023

In the previous day’s U.S. currency trading, the U.S. dollar emerged as the strongest currency from European to U.S. trading hours. The EUR/USD pair fell from 1.0768 to 1.0705, breaking below the 4-hour 20-period moving average (MA) with a bearish candle.From a technical perspective, the EUR/USD pair is positioned just below the daily 10-day moving average (MA), with the 200-day simple moving average (SMA) looming above. We will need to monitor the situation closely to see if the US dollar regains strength and the EUR/USD pair continues to decline after a period of consolidation.

European currencies saw the pound rise against the yen immediately following the release of yesterday’s UK employment data, as the unemployment rate came in at 4.0% as expected. GBP/JPY rose from 182.943 to 183.821.During today’s Asian session, the pair has risen to 184.229, just below the 200-period SMA on the hourly chart. On the higher timeframe weekly chart, the 10-period MA is acting as a support level, and the pair has rebounded firmly. However, on the daily chart, the pair has been forming lower highs, so caution is advised regarding the direction until it breaks above the recent high on the daily chart.

Today’s schedule includes UK GDP, UK manufacturing output, and the UK trade balance at 3:00 PM during Asian trading hours; Hungarian industrial production at 3:30 PM; the Hong Kong Producer Price Index at 5:30 PM during European trading hours; the EurozoneIndustrial Production at 17:30, Israel’s Trade Balance at 19:00, the U.S. Consumer Price Index at 21:30 during U.S. trading hours, U.S. Weekly Crude Oil Inventories at 23:30, the U.S. 30-Year Treasury Auction at 26:00, and the U.S. Fiscal Balance at 27:00. We will carefully assess the direction of the pound following the UK employment report, which showed an unemployment rate of 4.0%.