UK Jobs Preview: What to Expect of GBP/USD?
The GBP/USD pair found support at 1.4350 levels and now attempts a minor-recovery towards 1.44 handle on stalled oil price sell-off, while the latest Brexit polls showing increased support in favour of ‘remain’, also aided the recovery in the cable.
Wages to show no growth in February
On the data front, employment data out of the UK will be closely watched this Wednesday. The UK is expected to have added 60,000 jobs in the three months to February, with the unemployment rate expected to stay at 5.1%.
But what will be more important to watch will be wage growth numbers, given that the Bank of England closely monitors the labour markets as it remains one of the key parameters that determine the central bank’s interest rate outlook. It’s worth noting that the BoE cited weak wage growth as part of its reason to keep rates unchanged for over seven years in April. Average weekly earnings are forecast to remain at 2.1%, unchanged from the previous quarter’s 2.1% growth.
Should the wages price pressures drop in the reported month, we could see some fresh selling in the GBP/USD pair, while in-line numbers would also have a negative impact on the prices. In case the figures surprise to the upside, the cable could rebound to test 1.44 handle. However, limited reaction could be seen on the data as the oil price action is likely to remain the primary market driver today.
GBP/USD: Key technical levels to watch on UK data
At 1.4375, the pair finds immediate support at 1.4350 (daily low/ psychological levels), below which 1.4313/1.4307 (1h 50-SMA/ daily S1) could be tested. On the flip side, the next resistance is lined up at 1.4400/19 (round number/ Apr 19 High), above which 1.4442/60 (daily R1/ Mar 30 Low) would be tested.
(Market News Provided by FXstreet)