Fundamental Analysis:

The dollar turned lower against the other major currencies on Friday after a weaker than expected U.S jobs report for September dampened expectations for a rate hike by the Federal Reserve this year.

The Labor Department reported that the U.S. economy added just 142,000 jobs last month, well below expectations of the 203,000 expected by economists.

August’s reading was revised down to 135,000, from the initial reported figure of 173,000.

Average hourly earnings were flat month-on-month and the labor force participation rate fell to just 62.4%, down from 62.6% in August. The unemployment rate was unchanged at 5.1%, in line with forecasts.

The report underlined fears that a slowdown in global economic growth has spread to the U.S. economy and prompted investors to push back expectations on the timing of an initial rate hike by the Federal Reserve to early 2016.

Higher U.S. interest rates would boost the dollar, making the currency more attractive to yield seeking investors.



Technical Analysis:

GBP/USD fell to 1.5105 last week but recovered ahead of 61.8% retracement 1.4565 to 1.5929 at 1.5086. Initial bias stays neutral this week first. Some consolidations would be seen and the recovery might extend to 55 days EMA if price pushes higher further. But risk will still stay on the downside as long as 1.5658 resistance holds in the long term picture. Also there seem to be price rejection on 55 EMA on the 4 hours chart in the medium term picture. Sustained break of 1.5086 support will pave the way to retest 1.4565 low.


In the week ahead, investors will be focusing on Wednesday’s minutes of the Fed’s September meeting, when the central bank decided to delay hiking rates.

Central bank meeting in the U.K will also be closely watched.

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