UK Jobs report overview
Early Tuesday, the UK’s Office for National Statistics (ONS) will release the May month Claimant Count figures together with the Unemployment Rate in the three months to April at 06:00 AM GMT.
Although the mystery over the UK’s unlock was recently solved with an official announcement of a four-week delay in the June 21 deadline, the Bank of England’s (BOE) bullish bias keeps employment data on the prime list.
Additionally, BOE Governor Andrew Bailey’s speech at 12:15 PM GMT adds to the job report’s importance for the GBP/USD traders.
The UK labor market report is expected to show that the average weekly earnings, including bonuses, in the three months to April, grew from the previous 4.0% to 4.9%, while ex-bonuses, the wages are seen improving from 4.6% to 5.3% during the stated period.
Further, the ILO Unemployment Rate favors upbeat signals of the employment data as forecasts suggest sustained weakness from 4.8% during the three months ending in March to 4.7% for the period ended in April. It’s worth noting that the Claimant Count Change figures were -15.1K for the previous month while the Claimant Count Rate was 7.2% for April.
Deviation impact on GBP/USD
Readers can find FX Street's proprietary deviation impact map of the event below. As observed the reaction is likely to remain confined around 20-pips in deviations up to + or -2, although in some cases, if notable enough, a deviation can fuel movements over 60-70 pips.
How could they affect GBP/USD?
GBP/USD defends 1.4100 while extending the previous day’s recovery moves to 1.4110 heading into Tuesday’s London open. The pair struggles to justify the official confirmation of a four-week delay in the UK’s unlock deadline as well as Brexit woes amid lackluster US dollar moves. The reason could also be traced to the downbeat US Treasury yields amid cautious sentiment ahead of the key data at home and the US Retail Sales, not to forget Wednesday’s Federal Open Market Committee (FOMC) meeting.
Given the BOE’s bullish bias and clearer signals of tapering of late, GBP/USD bulls should remain hopeful on the positive data, which is more likely. However, the pre-Fed anxiety may curb the pair’s gains.
Technically, 200-SMA restricts the immediate downside of GBP/USD prices around 1.4095, a break of which will drag the quote to the latest low near 1.4075 ahead of highlighting the May 13 bottom surrounding the 1.4000 psychological magnet. Meanwhile, the corrective pullback needs to cross 1.4120 before attacking the eight-day-old resistance line near 1.4180, a break of which should convince the GBP/USD bulls.
Key notes
GBP/USD looks to UK jobs, Brexit to defend 1.4100
GBP/USD Forecast: Pressure mounts on the pound
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).
