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GBP/USD analysis on April 2. Nonfarm Payrolls cannot grow forever, and the unemployment rate cannot fall forever


For the pound/dollar instrument, the wave markup continues to look very convincing and does not require any additions. The assumed wave d in E is completed, and there should be five waves in total inside the wave E, respectively, as in the case of the euro/dollar instrument, the downward trend section can continue its construction for some time. The assumed wave d in E may take on a more extended, three-wave form. This is supported by the fact that wave b in E has taken a five-wave, extended form. Also in favor of this is the unsuccessful attempt to break the low wave c in E. Thus, the instrument simply could not break through the 76.4% Fibonacci level and now the construction of a new upward wave has begun. This wave can be corrective, internal in the composition of e in E, or it can be the beginning of the wave c-d-E. In the first case, the decline in the British dollar quotes should resume in the near future, in the second case, the instrument may return to the 1.3274 mark, which corresponds to 61.8% Fibonacci. But one way or another, I expect the construction of the wave e in E.

American statistics have ceased to please the market.

The exchange rate of the pound/dollar instrument on April 1 decreased by only 25 basis points, and market activity was low - the amplitude was 30 points. Thus, the most important statistics in America were virtually ignored. The demand for the US currency has hardly changed after the data on the labor market, wages, and unemployment became known. But let's see, was there anything to react to? First, the US currency has been growing for quite a long time, the downward trend section has been under construction for almost a year. And given the geopolitics, it may well continue building for some time. But now it is five-wave. It may lengthen, but it cannot become more complicated all the time. Thus, the dollar now simply does not need additional demand factors.

Second, the unemployment rate dropped to 3.6%. Let me remind you that the minimum value of the indicator before the pandemic was 3.5%. Thus, unemployment has already fallen to minimum values and it has nowhere to go further. And there is no special point in this. Well, it will decrease by another 0.1%, for an accelerated economy it will not matter much. Third, Nonfarm Payrolls cannot grow forever. In the last year, everyone got used to the fact that their number should not be less than 500K. And if less, then the report is weak. However, I want to remind you that before the pandemic, the normal value of nonfarm was 200K per month. Given that unemployment has fallen to minimum values, nonfarm levels should also fall to pre-crisis values. Therefore, 431K new jobs is an excellent result. In addition, the last report was revised to 750K. However, this news did not cause an increase in demand for the US currency. It seems that the construction of a downward trend section is gradually nearing its completion.

General conclusions.

The wave pattern of the pound/dollar instrument still assumes the construction of wave E. I continue to advise selling the instrument with targets located around the 1.2676 mark, which corresponds to 100.0% Fibonacci, according to the MACD signals "down", since the wave E does not look completed yet. Wave d can take a three-waveform and lengthen - wave b turned out exactly like this, but in any case, we should consider the signals "down", and while wave b continues to build, the MACD indicator is mainly rising.


At the higher scale, wave D looks complete, but the entire downward section of the trend does not. Therefore, in the coming weeks, I expect the decline of the instrument to continue with targets well below the low of wave C. Wave E should take a five-wave form, so I expect to see the quotes of the British near the 27th figure.

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