Economic Events Outlook, March 19 – How to Trade the GBP/USD Today?
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 Kindom, Current Account from New Zealand and German ZEW Economic Sentiment from Eurozone. Here’s what to expect from these events.
Key Economic Event’s 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 3.4% average earnings in February 2019. While economists are expecting it to slightly drop to 3.2% 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 14.2K in February but economists are expecting a drop to 13.1K in March. 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 Pays
The British Pound traded bearish to place a low around 1.3200 since the formation of inside bar. GBP/USD gained support above 1.3220, 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 $1.3200, 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 $1.3300 and $1.335 along with support near $1.3200.
Daily Technical Levels
Key Trading Level: 1.3243
GBP/USD – Trade Plan
The British Pound remains under the spotlight as the market is expecting labor market report from the United Kingdom later today. Growth in the labor sector will help is capture a buying trade in the GBP/USD, and vice versa. Today 1.3220 is a very crucial trading level as below this, the pair has a potential to go after 1.3120 and the pair can target 1.3360 above this level.