We’ve shifted back to the top of the recent range as UK’s claimant count change and unemployment data announced today, Change in the number of people claiming unemployment remained at 6.7K -related benefits during the previous month, while unemployment rate remained unchanged at 5.1%.
As a result, GBP/USD a move through 1.4393 resistance is needed to open more important resistance around 1.48.
Otherwise we project the range to hold, with 1.4250/40 pivot support ahead of the 1.40-1.3835 range lows.
Medium term, we expect the market to continue to trade a range between 1.3850-1.35 support and 1.45-1.48 resistance.
Should we see a breakdown through 1.40, then we have little in the way till meaningful support in the 1.4229 region.
Receive the belly of the level adjusted 1Y/1Yx1Y/2Yx1Y GBP swap fly. Stay neutral duration. Keep paying the belly of the 2s/5s/10s gilt fly (50:50).
Keep 5s/40s swap curve steepners. Gilt 1H21 and 1H26 auction previews.
Take profit on short belly 4H34/4Q40/3Q44 cash and duration neutral fly.
Keep 4Yx1Y GBP/USD cross currency basis widener, bias for a flatter 5s/10s GBP swap spread curve.
Stay short 3Mx2Y gamma and long 6Mx10Y gamma.


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