Yesterday GBP/USD failed to overcome the resistance level of 1.4430
British data were worse than expected. It made the pair GBP/USD to remain in the current price range for an indefinite period.
The average earnings index + bonus showed 1.8% against the expectations of 2.3%. The claimant count change showed an increase by 6,7K against the expectations of decline by 11.3K. The unemployment rate remained unchanged 5.1%.
The UK labor market reports confirmed the problems experienced by the economy as a result of the “cooling” of the global economy and the threat of Brexit. Perhaps this is why the employers started to refuse from hiring new workers. It is worth to note that the results of the latest polls show the increase of supporters to stay - up to 52%.
Today, the Cable may receive the expected additional pressure from weak retail sales. In March the retails sales are expected to decrease by 0.1%, the core retails sales are forecasted to decrease by 0.4%.
In the US, Philadelphia Fed Manufacturing Index is forecasted down from 12.4 to 8.9. Initial jobless claims may show some deterioration - 265K vs. 253K the previous week.
How to trade
We expected the decline in the pair GBP/USD to the 1.4200 area. We should buy put options if the pair falls below 1.4306.
Target price: 1.4306
Expiry time: 20:00 GMT