U.S. Initial Jobless Claims

Initial Jobless Claims measures the number of individuals who filed for unemployment insurance for the first time during the past week. This is the earliest U.S. economic data, but the market impact varies from week to week.

Despite the Omicron spreading across the U.S, the number of claims did not change. Last week’s number remained unchanged at 205K. In fact, the U.S. reported the most significant drop in jobless claims since 1969. This is a sign of the economy recovering well and perhaps ending 2021 on a high.

The report is due Thursday, 30 December at 13:30 GMT.

GBPUSD Technical analysis – Daily time frame

Analyzing the overall trend is the most crucial step in trading. Here, we are using the moving average and cross-overs to predict the market direction and any changes.

Moving Average (M.A.)

The overall market is on the downside; we can see the dead cross formation daily, meaning 50MA crossing the 200MA moving down.

Technical Analysis using Price Action:

From the price action view, we could see the price in the daily time frame is moving down, making lower highs and lows. The price is seen moving inside the bearish channel. The price movement was adverse because the death cross occurred around 1.36000.

Due to the death cross formation market saw some serious down movement with big bearish candles. The recent low was around 1.32000, and the price tried to jump up from the zone and successfully broke the latest short swing high.

We can get the exact entry and support/resistance zones by moving to the lower time frame.

Potential pivot points using Price Action:

Resistance Pivot		Support Pivot
R1	1.3460	S1	1.3411
R2	1.3485	S2	1.3389
R3	1.3508	S3	1.3363

This considerable resistance and support level can enter or exit when approaching future market openings.

GBPUSD Technical Analysis – 4Hour Time Frame

Relative Strength Index (RSI)

We apply RSI to check for overbought, oversold, or divergence on the 4hr time frame. The RSI was close to the 70 zone that signifies overbought sentiment.

Looking at the 4-Hr time frame for possible trade entries, we could see the price making multiple candle rejections on the latest support formation. The price also made a golden cross, i.e., the 200MA crossing the 50MA moving up. After the crossover, the price was seen pushing on the upside, also breaking the swings high.

There are some resistance levels that the price needs to pass to make the bearish channel successful. There is no clear sign of long-term up movement because of less market volume.

Traders must wait for confluence before taking any counter-trend.

Key Trading Recommendation

The U.S. jobless claims will impact investors’ sentiment as it indicates the unemployment condition in the country and the overall growth of the job market. 

The news will generate high volatility in the market; therefore, traders should avoid entering before or soon after the news release, and preferably wait for the market to settle down first.