Two trades to watch: GBP/USD, Nasdaq

GBP/USD holds 1.41 as the UK labour market continues its recovery. The Nasdaq closed at a fresh all time high, US retail sales due later, FOMC begins.

Jobs 2

GBP/USD holds 1.41 as the labour market recovery continues 

The unemployment rate in the 3 months to April ticked lower to 4.7%, down from 4.8%. 

The claimant count declined by 92.6k as people came off furlough and re-entered the work force. 

Average earnings jumped by 5.6%, up from 4.3%. 

UK PM Boris Johnson delayed the final reopening of the UK economy by 4 weeks. 

BoE Andrew Bailey is due to speak at 12:15 GMT 

The US Dollar index is edging a few pips lower as investors remain fixed on tomorrow’s Federal Reserve monetary policy announcement. 

US retail sales are expected to show -0.8% MoM down from 0% 

A guide to GBP

Where next for GBP/USD? 

After hitting 1.4250 on 31st May, GBP/USD has slipped 150 points. The pair found support in the previous session on its ascending trendline dating back to mid April.  

The pair is holding above 1.41 however the bearish MACD is keeping sellers hopeful. 

Any move lower would need to break below the ascending trend line support at 1.4070, also yesterday’s low. Taking out that technical barrier could see GBP/USD test 1.40, the 50 sma and round number. 

Should the pair maintain levels above last week’s low then a rebound towards 1.42 could be possible. If the June high is taken out then GBP/USD could make a move towards the year to date high of 1.4250.  

 

Nasdaq hit fresh record highs, retail sales in focus, FOMC begins 

The Nasdaq closed at record highs, boosted by big tech names such as Apple, Facebook and Amazon.  

Bond yields also remain depressed amid expectations that inflation will be transitory and the Fed won’t be forced to slam on the breaks. 

There is only one show in town this week and that’s June’s FOMC which kicks off today with the announcement due tomorrow. 

Data wise US retail sales are expected to show -0.8% after a 0% 

Where next for the Nasdaq? 

The Nasdaq broke above 14070 resistance, the high April 29, to close at an all time high in the previous session.  

Taking out this level boosts the chances of further upside and the index has continued to push higher overnight reaching 14162. 

The RSI is supportive of further upside, whilst it remains out of overbought conditions. 

It would rake a move below 14070 to negate the near term uptrend. A move below 13725 the 50 sma could see the sellers gain traction. 

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