The GBP currency fell to fresh lows against its rivals on board during today’s trading session after the Bank of England left its forecasts for growth and inflation largely unchanged and played down speculation over the timing of a possible rate hike.
Data also showed that U.K. unemployment rate fell to a more than five-year low in the three months to March. The Office for National Statistics reported that the U.K. unemployment rate ticked down to 6.8% in the three months to March from 6.9% in the three months to February, in line with expectations.
The claimant count fell by 25,100 last month compared to expectations for a decline of 30,000 people. March’s figure was revised to a drop of 30,600 people from a previously reported decline of 30,400.
The report also showed that average weekly earnings rose by 1.7% on a year-over-year basis in the three months to March, but excluding bonuses average earnings only raised by 1.3% during the quarter, and just 1.0% in March.
With these fundamental back up, technical direction for the GBP/USD remains on the downside as more supply to 1.67250 (weekly support 2) is expected. Exponential Moving Averages 21 and 55 with oscillators such as RSI, MACD and stochastic on the 4hours and 1hour time frames shows more decline should be seen. A trend line break to the downside also supports the bearish move on the daily charts. Furthermore, price seems to retrace to test the weekly support 1 and a bounce back to the downside was seen; hence weekly S1 is acting as a resistance.