Economic Events Outlook, Jan 22 – How to Trade the GBP/USD Today? - Forex News by FX Leaders

Economic Events Outlook, Jan 22 – How to Trade the GBP/USD Today?

Posted Tuesday, January 22, 2019 by
Arslan Butt • 2 min read

Good morning, traders.

The financial markets exhibited thin volatility in the wake of a national holiday in the United States. Well, the traders are back and the economic calendar is also loaded with some high impact economic events. Most of the focus will remain on the labor market report from the United Kingdom and inflation figures from New Zealand. Here’s what to expect from these events.

Key Economic Events Outlook

The UK labor market reports aren’t expected to surprise the market. These events are forecast to be neutral, just like the previous month.

Average Earnings Index 3m/y – It’s a leading indicator of consumer inflation and shows a change in price for businesses and the government pay for labor, including bonuses. Simply put, when businesses pay more for labor, the higher costs are usually passed on to the consumer which leads to inflation.

The UK’s Office for National Statistics reported a dramatic jump of 3.3% average earnings in November 2018. Meanwhile, economists are expecting a year-end with the same pace of 3.3% in this month.

Unemployment Report – Despite the Brexit uncertainty counting on the UK financial and consumer spending, the UK employment report seems solid. The recent jobs report is expected to be neutral. Jobless claims rose to 21.9k in November but economists are expecting a drop to 20.1k in December. The smaller figure shows a growth in the labor market and it encourages the BOE (Bank of England) to keep the policy hawkish.

In addition to this, the unemployment rate is expected to remain unchanged at 4.1%.

GBP/USD – Inside Bar Plays

The British Pound traded bearish since the formation of inside bar. The pair gained support above 1.2825, the level we shared in the weekly outlook report.

Today, most of the market movement depends upon the UK labor market report. However, the technical side is signaling a bullish bias for GBP/USD. On the 4 hour chart, the cable took a bearish turn to test the support level at $1.2825, but it failed to give us a bearish crossover.

This signifies traders’ bullish bias for the pair. The GBP/USD pair may face an immediate resistance near $1.2950 and $1.3045 along with support near $1.2830.

Daily Technical Levels
Support    Resistance
1.2848      1.2929
1.2799       1.2961
1.2718       1.3042
Key Trading Level: 1.288

GBP/USD – Trade Plan

Investors are expecting labor market report from the United Kingdom which is why all eyes remain on the Sterling. Growth in the labor sector will help us capture a buying trade in the GBP/USD, and vice versa.

I will consider stay bearish below 1.2900 with a stop above 1.2925 and take profit around 1.2830. While buying will be preferred above 1.28250 today.

Good luck!

Check out our free forex signals
Follow the top economic events on FX Leaders economic calendar
Trade better, discover more Forex Trading Strategies

About the author

Arslan Butt // Index & Commodity Analyst
Arslan Butt is our Lead Commodities and Indices Analyst. Arslan is a professional market analyst and day trader. He holds an MBA in Behavioral Finance and is working towards his Ph.D. Before joining FX Leaders Arslan served as a senior analyst in a major brokerage firm. Arslan is also an experienced instructor and public speaker.
Related Articles
Comments

Leave a Reply

avatar
  Subscribe  
Notify of