GBP Trading Firmly Lower Despite U.S. Statistics |

Yesterday, the extended its weakness and closed the trading day with significant losses. It looks rather weird because the actual change in US employment claims came as an unpleasant surprise.

The number of actually increased 4K last week, defying the forecast of a 13K decline. Moreover, the number of inched down just 3K whereas analysts had projected a big decrease of 85K. This negative was somehow offset by the second estimate of US GDP for Q2 2021.

According to the revised data, the US economy expanded 6.6% sequentially, slightly better than the 6.5% growth in the first estimate. Nevertheless, this minor quarterly revision as well as the same annual rate at 12.2% outweighed the tepid data on unemployment claims.

So, investors are still bullish about the . The steady decline of the pound sterling confirms that the greenback is still flexing its muscles. The US dollar’s weakness earlier this week is nothing but a common technical correction. Today the pound sterling could extend its fall amid the empty economic calendar.

US Continuing Unemployment Claims

GBP Trading Firmly Lower Despite U.S. Statistics |

The sterling dropped off resistance of 1.3780 where traders increased the volume of short positions. As a result, the US dollar rebounded after a downward correction. The sellers are facing 23.6% Fibonacci level at 1.3670 which could serve as support during the downward move.

RSI indicator is holding at near 43, higher than the overbought level of 30. It means that the market has some space for more short positions.

A daily chart displays a downward move from 1.4000. Technical corrections, which are an integral part of any trend, signal that the upward cycle has come to an end.

Outlook and trading ideas

All in all, GBP/USD is set to trade lower towards the swing low of Aug. 20. Traders might scale up short positions at about 1.3660 and at the moment when the swing low of 1.3595 is broken.

Complex and indicator analysis is generating a sell signal for the short, medium, and long term in view of a further downtrend.

GBP Trading Firmly Lower Despite U.S. Statistics |

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