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GBP/USD Surges after Unemployment Rate Drops to 6.9%

UK's unemployment rate fell from 7.2% to 6.9% for the Dec. 2013-Feb. 2014 months. Economist's forecasts according to forexfactory.com was the same: 7.2%. 


(UK unemployment. Source: tradingeconomics.com)

The surprise drop brought the unemployment rate to a 5-year low, and sent the GBP skyrocketing. 


(gbpusd 1h chart, 4/16)

GBP/USD rebounded earlier in the week despite low UK inflation data. This suggested the market dominated by bulls. Before the UK unemployment rate releases, cable was already bullish, breaking above 1.6750 as the London trading session began. 

A break above 1.6820 will open up a new high on the year, continuing a bullish trend that started in July of 2013.

As we get into the 4/16 US session, the 1H chart shows overbought condition. However, a bullish market should stay above 1.6750, the previous resistance area that could turn into support.