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 11.3k in the three months to May, compared to a massive gain of 31.2k booked in the three months to April. The ILO unemployment rate is expected to hold steady at 4.2% during the period.

Average weekly earnings, including bonuses, in the three months to April, are expected to remain unchanged at 2.6%, while ex-bonuses also, the wages are seen steady at 2.9% in the reported period.     

How could they affect GBP/USD?

A positive surprise in the UK’s average earnings report could rescue the GBP bulls, which could send the rates back towards the 1.34 handle. On a disappointing result, the GBP/USD pair could target the 1.3300 support area.

However, the reaction to the data may remain limited, as the House of Commons vote on the UK Withdrawal bill and the US CPI data are likely to remain the key focus in the session ahead.

Haresh Menghani, Analyst at FXStreet explains, “With short-term technical indicators gradually slipping back into bearish territory, a follow-through weakness below the descending trend-channel support, near the 1.3330 region, is likely to accelerate the slide towards the 1.3300 round figure mark. The downfall could further get extended towards 1.3250-45 horizontal support, back closer to YTD lows set in May.” 

“On the flip side, any meaningful recovery attempts might now confront strong resistance near the 1.3400 handle and is followed by the 1.3420-30 supply zone. A convincing move beyond the mentioned barriers would negate any near-term negative bias and assist the pair to attempt a move towards reclaiming the key 1.3500 psychological mark,” Haresh adds.

Key Notes

UK: Unemployment rate to hold steady at 4.2% - TDS

UK inflation Preview: Inflation set to pick up as fuel prices feed through

GBP/USD peering over the edge, as a miss for UK earnings today could see the pair back into May's lows

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).