U.K. Unemployment has remained the same at 7.2%, and the Claimant Count Change was better than expected at -34.6K, down from -33.9K last month.
GBP/USD has been consolidating in a tight channel for over a month now, grinding lower at a very slow pace while maintaining a bullish trend on the large time frames. Cable fell as low as 1.6544 in yesterday’s trading, bouncing off the support of the channel with a bullish pin bar.
Within the channel, there is a steeper bearish configuration based on the most recent three swing highs and the 200 simple moving average on the 1H time frame. While price remains below 1.6664, cable will remain bearish in the short term. Selling rallies remains the preferred trading strategy at this point, with a stop loss above the mentioned level.
In the large picture, the bullish trend will degrade considerably if GBP/USD breaks below 1.6544, where the support lies for the current channel formation. MACD is showing increased weakness on the Daily time frame; as it is approaching negative territory, we are about to exit the current slow grind and see some increased volatility. For bullish scenarios, a break above 1.6664 should lead to yet another test of the channel resistance around 1.6763 area.