Bullish View
- Buy the GBP/USD pair and set a take-profit at 1.2750.
- Add a stop-loss at 1.2600.
- Timeline: 1-2 days.
Bearish View
- Sell the GBP/USD pair and set a take-profit at 1.2600.
- Add a stop-loss at 1.2750.
The GBP/USD exchange rate moved sideways after the JOLTS job vacancy numbers showed that the economy was doing modestly well. It was trading at 1.2670, down by over 5.6% from its highest point this year.
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Key Economic Data Dhead
The GBP/USD pair reacted mildly to the latest JOLTS job openings numbers. According to the Bureau of Labor Statistics (BLS), the number of job vacancies in the US rose to 7.74 million in October, higher than the median estimate of 7.5 million. It was a big increase from 7.37 million in the previous month.
The next key data to watch will be the upcoming ADP nonfarm employment change numbers. Analysts expect the data to show that the private sector created over 166,000 jobs in November after creating 233k in the previous month.
These numbers will come a few days before the BLS releases the official jobs numbers on Friday. Analysts see the numbers showing that the economy created over 200k jobs, a big increase after it added just 12,000 in the previous month.
The labor numbers will provide more color on what the Federal Reserve will do when it meets next week. If the official jobs numbers are weaker-than-expected, there are chances that the Fed will cut rates by 0.25%.
The GBP/USD pair will next react to the upcoming US and UK services and composite PMI numbers. Economists see the data showing that the services sector remained in the expansion zone. Still, while these numbers are important, their impact on the GBP/USD pair will be limited.
GBP/USD Technical Analysis
The GBP/USD exchange rate has remained in a tight range in the past few days as traders wait for the upcoming US jobs numbers. It was trading at 1.2695, a few pips above its lowest point last week.
the GBP/USD exchange rate has formed an inverse head and shoulders pattern, a popular bullish reversal pattern. It has also risen above the key support level at 1.2670, its lowest swing in August this year.
Therefore, because of the inverse H&S pattern, the pair will likely have a strong bullish breakout in the next few days. The initial target to watch will be at 1.2750, its highest point last week. A break above that level will see the pair rising to the psychological point at 1.2800.
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