The GBP/USD advanced for a fifth consecutive day on Friday, as mostly positive UK employment figures capped off a strong weekly rally that saw the pair gain more than 2%.
The GBP/USD traded at 1.4986 in the North American session, up 50 pips from the previous open. The British pound has taken advantage of a much weaker US dollar, which backtracked for much of the week amid disappointing economic data. The next support level for the GBP/USD is situated at 1.4684. Initial resistance is likely to be met at 1.5175.
In economic data, the UK labour market improved in the third quarter, as the unemployment rate fell to a fresh six-and-a-half year low. UK unemployment fell to 5.6% from 5.7% in the three months through February, the Office for National Statistics reported on Friday. Unemployment continued to decline in March, as the claimant count rate fell by 20,700. The decrease in claimant counts, which is a narrower measure of unemployment, was less than forecast.
Meanwhile, wage growth continued to outstrip inflation by a wide margin. Average earnings excluding bonuses rose 1.8% annually in the three months through February, up from 1.6% the previous month. Including bonuses, average earnings were up 1.7% after rising 1.9% the previous month.
In US data, tepid inflation continued to support expectations that the Federal Reserve will hold off on raising interest rates this summer. US consumer prices rose 0.2% in March, as gasoline prices continued to appreciate. Compared to March 2014, the CPI rate was -0.1%.
Separately, Thomson Reuters and the University of Michigan said US consumer confidence rose in April to its highest level since 2007, although cautioned that expectations were still tied to a growing dependence on low interest rates. The Reuters/University of Michigan consumer sentiment index climbed to 95.9 in March from 93.0 the previous month. A median estimate of economists called for an increase to 94.0.
In other trading, the British pound also strengthened against the euro on Friday, as the EUR/GBP fell 0.26% to 0.7187. The pair faces initial support at 0.7139 and resistance at 0.7248.
The pound rallied against the Japanese yen, as the GBP/USD climbed to a daily high of 178.78. The pair subsequently consolidated at 178.38, advancing 0.36%. The pair faces initial support at 175.93 and resistance at 179.84.