The GBP\/USD pair experienced heavy selling in early European trading, hitting mid-1.3200s. This marks the lowest level since early August, following a disappointing UK labour market report released by the Office for National Statistics.<\/p>\n
UK unemployment rose to 4.8% from the previous 4.7% for the three months to August, with a 25.8K increase in jobless benefit claimants in September. Average Earnings, including bonuses, went up by 5.0%, but regular pay growth fell to 4.7%.<\/p>\n
These figures could influence the Bank of England to continue lowering interest rates. The US Dollar’s strength further contributed to pressure on the GBP\/USD pair.<\/p>\n
The GBP\/USD is nearing a two-month low of 1.3260 due to the disappointing UK labour data. The pair is approaching a medium-term ascending trendline, which could potentially support a rebound if the 23.6% Fibonacci retracement level at 1.3370 is reached.<\/p>\n
Resistance may also be seen at the mid-level of the Bollinger Band and the 50-day simple moving average in the 1.3435\u20131.3475 range. The market awaits more data that could further influence the currency pair’s movements.<\/p>\n
The weak UK jobs report has clearly shifted sentiment against the pound. This aligns with the latest CPI figures released last week, which showed inflation cooling to 2.1%, missing expectations and falling further from the Bank of England’s target. This puts a rate cut firmly on the table for the November meeting.<\/p>\n
We see traders positioning for a further slide in GBP\/USD by buying put options with strikes around 1.3200 and 1.3150. This strategy offers a defined-risk way to profit if the pair breaks below its current two-month lows. Implied volatility has already climbed to 9% for one-month options, suggesting the market is bracing for more turbulence ahead of the BoE’s decision.<\/p>\n
For those looking for a more capital-efficient approach, a bear put spread could be effective. This involves buying a put option, for example at the 1.3250 strike, and selling another put at a lower strike like 1.3150 to help finance the position.<\/p>\n
The dollar’s strength is a key part of this equation, especially after last Friday’s US retail sales data beat forecasts, reinforcing the Fed’s steady stance. We saw a similar divergence in monetary policy back in 2016 after the Brexit vote, which led to a sustained period of sterling weakness. That history suggests this downward trend could have legs if the BoE follows through with a cut.<\/p>\n
The 200-day moving average, now approaching the 1.3200 level, is the next major target that short-sellers using futures contracts are watching. However, we must be cautious of a short-term bounce from the ascending trendline mentioned, which could trigger a squeeze.<\/p>\n
Create your live VT Markets account<\/a>\u00a0and\u00a0start trading<\/a>\u00a0now. <\/b><\/p>\n","protected":false},"excerpt":{"rendered":" GBP\/USD plunges to mid-1.3200s after weak UK jobs data; trendline, Fibonacci may offer support.<\/p>\n","protected":false},"author":62,"featured_media":17034,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[59],"tags":[],"class_list":["post-32220","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-live-updates"],"acf":{"acf_article_selection_author":null},"aioseo_notices":[],"_links":{"self":[{"href":"https:\/\/www.vtmarkets.com\/en-ca\/wp-json\/wp\/v2\/posts\/32220","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.vtmarkets.com\/en-ca\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.vtmarkets.com\/en-ca\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.vtmarkets.com\/en-ca\/wp-json\/wp\/v2\/users\/62"}],"replies":[{"embeddable":true,"href":"https:\/\/www.vtmarkets.com\/en-ca\/wp-json\/wp\/v2\/comments?post=32220"}],"version-history":[{"count":0,"href":"https:\/\/www.vtmarkets.com\/en-ca\/wp-json\/wp\/v2\/posts\/32220\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.vtmarkets.com\/en-ca\/wp-json\/wp\/v2\/media\/17034"}],"wp:attachment":[{"href":"https:\/\/www.vtmarkets.com\/en-ca\/wp-json\/wp\/v2\/media?parent=32220"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.vtmarkets.com\/en-ca\/wp-json\/wp\/v2\/categories?post=32220"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.vtmarkets.com\/en-ca\/wp-json\/wp\/v2\/tags?post=32220"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}