UK Average Earnings – Another Indicator Pointing Downward
GBP/USD has been climbing higher since it bottomed out in January. It broke the 1.30 resistance level a few weeks ago, but it was a fake break. Then, I mentioned a couple of times that the break of 1.30 was probably due to big names conducting stop hunting above 1.30.
Once those weak stops were triggered above 1.30, this forex pair reversed back down and last week´s UK elections gave it another push lower.
The price formed a short term bottom at 1.2630s yesterday and it retraced around 100 pips higher to the 200 SMA on the H4 chart. We opened a sell forex signal at that moving average yesterday, but this pair made a 50 pip jump this morning for no particular reason, so that signal got smoked.
Right now, this pair is looking bearish since it failed to break the 100 SMA (red) on the hourly forex chart. I see that our forex signal here would have hit take profit now if it wasn´t for that sudden jump at London's opening.
The reason for this latest dive was the disappointing average earnings (wages) report which was released earlier today. It missed expectations by 3 points and the GBP started tumbling.
This is yet another bearish fundamental indicator for GBP after the mess that Theresa May made of the UK elections.
So, down goes GBP/USD. Wages are a big factor in any economy and I think that today´s figures will weigh on the Pound over the coming days. The whole picture is looking pretty dark for the GBP, so we´ll try to get in short on GBP/USD, once we find a good place to sell.
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