The UK Claimant Count Change measures the change in the number of people claiming unemployment benefits. It provides a snapshot of the strength of the UK employment market. A reading which is better than the estimate is bullish for the pound.
Update: UK jobless claims rise 2.4K in August, wages mixed – GBP higher
Here are the details and 5 possible outcomes for GBP/USD.
Published on Wednesday at 8:30 GMT.
Indicator Background
Job creation is one of the most important leading indicators of overall economic activity. Thus, the publication of employment data is highly anticipated by the markets, and an unexpected reading could affect the direction of GBP/USD.
Claimant Count Change looked sharp in July, with a reading of -8.6 thousand. This easily beat the forecast of +5.2 thousand. The August report is expected to be much softer, with an estimate of 1.7 thousand.
Sentiment and Levels
British numbers have been generally strong in the third quarter, despite fears of an economic backlash from the Brexit vote. Will the good news continue? In the US, there is a reasonable likelihood that the Fed will press the rate trigger in December, but a final decision will depend on key US numbers. So, the overall sentiment is neutral on GBP/USD towards this release.
Technical levels from top to bottom: 1.3667, 1.3533, 1.3346, 1.3219, 1.3112 and 1.3020
5 Scenarios
- Within expectations: -2.0K to +5.0K: In this scenario, GBP/USD could show some slight movement, but it is likely to remain within range, not breaking any levels.
- Above expectations: 5.1K to -9.0K: A high reading could push the pair below one support line.
- Well above expectations: Above 9.0K: In such a scenario, two support levels could be broken.
- Below expectations: -6.0K to -2.1K: A lower reading than expected could push the GBP/USD higher, with one resistance line at risk.
- Well below expectations: Below -6.0K: A strong reading could push GBP/USD above two resistance lines.
For more on the pound, see the GBP/USD forecast.
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