The GBP/USD was on its heels Wednesday, but remained well supported above 1.5600 following disappointing UK job numbers.
The GBP/USD rose to an intraday high of 1.5673, but pared its gains later on in the day. Cable settled around 1.5608 in the early New York session, down 0.2%. Cable is likely to face initial support at 1.5544, followed by 1.5505. On the upside, initial resistance is likely found at 1.5735, followed by 1.5774.
According to the intraday Elliott Wave analysis, cable’s negative bias will remain intact so long as it remains below 1.5700.
Cable was under pressure after the Office for National Statistics reported an unexpected increase in UK unemployment, a sign Britain’s strong labour market recovery was beginning to moderate. UK unemployment rose to 5.6% in the three months through May, up from 5.5%. Data from the ONS also showed that unemployment rose by 15,000 in the three months to May, reaching 1.85 million. At the same time, employment decreased by 67,000 to 30.98 million from the prior quarter.
In June, the number of people claiming unemployment benefits rose by 7,000, the first increase since October 2012.
Meanwhile, average earnings including bonuses increased at a seasonally adjusted 3.2% in the three months through May, slightly below forecasts calling for 3.3%. Excluding bonuses, average earnings rose 2.8%, official data showed.
Cable had enjoyed a strong rally on Tuesday after Bank of England Governor Mark Carney indicated that interest rates would soon rise. Rates have remained at a record low of 0.5% for more than six years and are expected to remain that way until early 2016.
In other trading, the pound improved slightly against the euro, as the EUR/GBP declined 0.1% to 0.7034 after touching an intraday low of 0.7020. According to an analyst at the Royal Bank of Scotland, the EUR/GBP is unlikely to break below the 0.70 threshold.
In Greece, members of parliament are debating whether to approve the new austerity measures that were agreed to by Prime Minister Alexis Tsipras on Monday in exchange for a new bailout deal. The deal requires Athens to scale back on its pension program, raise taxes and sell state assets. Once passed, Greece would be eligible to receive up to €86 billion in emergency funds from the troika. According to analysts, Greek parliament is expected to pass the reforms before the end of the day, despite internal dissention within the Syriza party.