workingtraders

Broad USD strength + uncertain elections outcome causes weakness

FX:GBPUSD   British Pound/U.S. Dollar
214 0 7
theworkingtrader.com

No change in interest rates, which was expected from The Bank of England.
We have elections in the UK putting a shadow on GBP - if the conservatives win there is a possibility of Great Britain leaving the European Union.
We are looking at the GDP reading for the UK to read closer to 3% in 2015 to support growth. Weak CPI             is supporting household real income and Consumer spending - main engine of growth. US NFP data showed 295k jobs added in February. This is a huge surprise as a lot of analysts thought the weather would effect this. NFP is the leading indicator which the Fed are referring to when deciding whether to hike rates.

The only issue was Average Hourly Earnings came out at 0.1% vs 0.5% - this is important as it highlights the quality of that employment data.
Unemployment Rate did improve - 5.5% vs 5.7%.

Technicals :

GBPUSD             has broken supported around 1.52000 signally a possible test strong support at 1.49500 area.
There is no real indication that this pair will break this support but we will monitor the price action.
The recent rise could be seen as a small correction as the pair appears to re-enter the downward trend line .
We are monitoring to see if the support at 1.49500 area will hold as we have strong Broad USD strength after NFP.
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