Yesterday data on UK Unemployment rate was raising hopes. The number of unemployed dropped 8.6K vs. forecast for -6.8K. April's figures were revised upwardly from -7.3K to -11.8K. The unemployment range stayed flat at the level of 7.8%. The pound grew 36 points and reached the boarder of daily channel. Technically, the situation has four aspects, whether the price breaks the level and there will be further growth, whether the false break occurs and the price reverses and falls down, whether it is the high of two-week growth, and whether the alternative when the rebound from the level and further upward move are possible. Reversal signals are observed only on small time frames, thus, there is possibility that the support on the H4 1.5624 will be reached. The break opens the second target 1.5584, the level of Fibonacci 50%, if is breaks, it will be a good sign of continuation of downward movement. If the level of the third target is overcome, 1.5517, the bearish tendency will strengthen.
If the resistance of price channel is overcome, the price may reach the level of Fibonacci 61.8% on the H4, 1.5760.
As far as data on US retail sales is expected to be strong (0.4% vs. 0.1% in April), we consider the drop of the pound as consolidation of the dollar is the major scenario.
