Signals of forecast for British Pound (GBP) this week, May 2021
- UK employment increased for the fifth straight month.
- GBP / USD is approaching a new multi-year high.
Market anticipations were surpassed by the latest UK report on jobs. It demonstrated an increase in employment and a reduction in unemployment. The Office for National Statistics (ONS) says that the job market exhibits some weak signals of rebounding. The number of wage-workers is growing for the 5th sequential month, albeit the number is still lower 772,000 of pre-coronavirus pandemic levels.
On Wednesday and Friday this week, everybody waits for reports of inflation and the Markit PMIs respectively.
GBP/USD continued raising due to the conjunction of facts that Sterling’s strength was caused by the stronger data, the new stage of UK economic recovery, and the UK vaccination program achievements with a decremental US dollar. Cable rate peddles just under 1.4200, which is a new multi-year maximum of around 40 pips above higher. Whereas Pound’s long positions rose, and US dollar short positions grew according to the latest CoT data, it seems that there are only a few ways to prevent GBP/USD from achieving this aim.
The daily cable rate chart still tenders higher price with all 3 moving averages in a beneficial formation, whereas the bullish trendline stays standing. The fact that volatility in pair is still low says that the recent grind increase will continue, leaving the February 24 record at risk. Traders should keep in touch with the FOMC minutes, which were released on Wednesday. There could be seen Fed’s thoughts on inflation. Any unfavourable cue may cut down further GBP/USD growth.
GBP/USD daily price chart (JUNE 2020 – MAY 18, 2021)
Data of retail traders demonstrate that 37.27% of traders are net-long, with the proportion of traders short to long 1.68 to 1. Typically, analytics think otherwise, and the fact that traders are net-short supposes GBP/USD prices may still grow. The positioning now is more net-short than it was yesterday, but it was less net-short last week. The conjunction of current spirits and recent alterations gives everybody further mixed GBP/USD trading tendency.