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The British pound currency has continued to hold above the 1.2500 level against the US dollar after a quick dip towards the 1.2450 area after the buck strengthen in the aftermath of the Bank of England rate decision.
We are seeing GBPUSD gain strength due to improved confidence about the US debt ceiling and also a push higher from technical buying below 1.2500.
Traders now await the UK jobs data. The number of people in work in the United Kingdom went up by 169,000 in the three months to February 2023, well-above market expectations of a 50,000 rise and accelerating from a 65,000 growth in the previous period.
This marked was the largest increase since April 2022, as both full-time and part-time self-employed grew during the latest three-month period. Also, part-time employees increased, while full-time employees fell but still above pre-pandemic levels.
Worryingly, the number of people claiming for unemployment benefits in the UK rose by 28,200 in March of 2023, the first increase in three months, and the biggest since February of 2021
Looking at sentiment data and how traders feel about sterling, the ActivTrader Market Sentiment tool shows that traders are growing more bearish despite the recent sharp price reversal.
With 63% of traders are currently bearish and it should be noted that this current sentiment reading is highlighting that sterling still has much scope to trade even higher also.
GBPUSD Short-term Technical Analysis
Looking at the four-hour time frame, a clear range trade happening in a wedge pattern, with the GBPUSD pair trapped between the 1.2450 to 1.2700 levels.
According to the overall size of the pattern, I would expect that we could soon see a 200-point upside in GBPUSD if the price stays above the 1.2500 level.
GBPUSD Medium-term Technical Analysis
According to the daily time frame it shows that that GBPUSD pair is starting to settle above the neckline of an inverted head and shoulders pattern, which is located close to top of its medium-term range.
According to the technical analysis the GBPUSD is bullish and is getting a buy signal above the 1.2400 level, and we could see a ramp towards 1.3000 or a drop towards 1.2400.
