The GBPUSD approached the 1.50 region on Thursday and could break that critical threshold on Friday following the monthly UK jobs report, which is expected to point to an improving labour market.
The GBPUSD maxed out at 1.4962 on Thursday and was trading at 1.4937 in Friday’s Asian session. The pair has advanced 2.2 percent since Monday, as the markets shrugged off the growing possibility of a minority government ruling England after the May 7 general election.
The GBPUSD has been firmly capped below 1.50 since March 11, having made several failed attempts at breaching that critical level. The technical indicators are showing bullishness, as the pair appears poised to break the 1.4955 resistance. A breach of that level would expose 1.5053 as the next target. On the downside, support is likely found at 1.4743.
Technical trading probably won’t be enough to sustain a rally above the 1.50 level. Much like the AUDUSD, which broke out on Thursday following a stronger than expected Australian jobs report, the GBPUSD could test new highs following the ONS report.
The recent spike in the AUDUSD is a perfect case study of how quickly the market can change following employment data. On Thursday the AUDUSD surged 1.3 percent to test the 0.78 region after the Australian Bureau of Statistics said national employment rose by nearly 38,000 in March, while the unemployment rate dropped to 6.1 percent from 6.2 percent.
UK Employment Report
The claimant count rate, a narrower measure of unemployment, is forecast to drop by another 28,000 in March. The ILO unemployment rate is forecast to fall to a fresh 6-year low of 5.6 percent in the three months through February, compared to 5.7 percent in the November to January period.
Unemployment based on the International Labour Organization (ILO) methods declined by 102,000 to 1.86 million in the three months through January, the ONS reported last month.
May 7 General Election
The UK heads to the polls on May 7 in what pundits are calling the tightest parliamentary election in decades. Polls show that neither the Tories nor the Labor opposition will secure a majority government, which means no party will be able to govern alone.