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UK Jobs report overview

The UK labor market report is expected to show that the number of people seeking jobless benefits increased by only 3.8k in the three months to July, compared to a gain of 7.8k booked in the three months to June. 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 June,  are expected to remain unchanged at 2.5%, while ex-bonuses also, the wages are seen steady at 2.7% in the reported period.          

How could they affect  GBP/USD?

A positive surprise in the UK’s average earnings report could aid the recovery in the spot back towards the 1.28 handle. On a disappointing result, the  GBP/USD  pair could target the multi-month lows of 1.2723 reached last Friday.

Haresh Menghani, Analyst at FXStreet explains, “The 1.2735-25 region, the lower end of the mentioned trading range, might continue to act as an immediate support. A convincing break below the said support is likely to accelerate the downfall towards the 1.2700 handle before the pair eventually drops to test June 2017 lows, around the 1.2600-1.2590 region, with some intermediate support near the 1.2640-35 area.”

“On the flip side, any meaningful recovery attempt might continue to confront some fresh supply near the short-term descending trend-channel support break-point, now turned resistance, currently near the 1.2800-1.2810 region. A sustained move beyond the mentioned hurdle might trigger a near-term short-covering bounce and assist the pair to aim towards reclaiming the 1.2900 handle, “Haresh adds.

Key Notes

Market themes of the Day: UK wages and German ZEW headline

GBP/USD Technical Analysis: Cycling near 1.2770 ahead of UK earnings, unemployment

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).