When are the UK Jobs and how could they affect GBP/USD?

UK Jobs report overview

The UK labor market report is expected to show that the number of people seeking jobless benefits increased by 7.8k in the three months to April, compared to a rise of 11.6k booked in the three months to March. The unemployment rate is expected to hold steady at 4.2% during the period.

Average weekly earnings, including bonuses, in the three months to March are expected to dip to 2.6%, while ex-bonuses, the wages are seen a tad firmer at 2.9% in the reported period.        

How could they affect GBP/USD?

A positive UK’s average earnings report could offer fresh impetus the GBP bulls, which could send the rates back towards the 1.36 handle. On a disappointing result, the GBP/USD pair could target the four-month lows of 1.3458. However, the reaction to the data may remain limited, as the GBP traders eagerly look forward to the BOE’s inflation report hearings for fresh insights on the UK’s interest rates outlook.

Haresh Menghani, Analyst at FXStreet, notes, “On the upside, the 1.3600-10 region might continue to act as an immediate hurdle, above which the pair is likely to aim towards reclaiming the 1.3700 handle before eventually darting towards its next barrier near the 1.3750-55 region. On the flip side, the key 1.3500 psychological mark remains an immediate support to defend and is followed by the 1.3470-60 region, marked by 38.2% Fibonacci retracement level of the 1.1987-1.4377 upsurge. A convincing break below the mentioned support now seems to pave the way for an extension of the pair's near-term depreciating move and accelerate the fall towards the 1.3400 handle.”

Key Notes

UK employment and German ZEW amongst market movers today – Danske Bank

GBP/USD beginning to sour ahead of UK's earnings figures

European FX Outlook: The UK wage growth in the spotlight

About UK jobs

The UK Average Earnings released by the Office for National Statistics (ONS) is a key short-term indicator of how levels of pay are changing within the UK economy. Generally speaking, the positive earnings growth anticipates positive (or bullish) for the GBP, whereas a low reading is seen as negative (or bearish).