How to trade UK wages with GBP/USD
|- The UK jobs report and specifically core wage data always move the British Pound.
- The Market Impact Tool shows trading opportunities in both upside and downside surprises on this event.
- The GBPUSD moved, on average, 9 pips in the 15 minutes after the data release and 37 pips in the following 4 hours
Tradable figure: UK Average Earnings excluding Bonus (3Mo/Yr) (United Kingdom)
Buying GBP/USD Scenario
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Tradable Positive Trigger: +1.0932 deviation (2.7535%) [BUY Pair]
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Key Resistance Level: 1.2850
This time, if it comes out at higher than expected with a relative deviation of 1.0932 or higher (2.7535 or higher in actual terms), the pair may go up reaching a range of 30 pips in the first 15 minutes and 78 pips in the following 4 hours.
1.2775 was a low point in August 2017 and remains important. 1.2850 capped the pair on a recovery attempt in mid-August and was a swing low back in September 2017. 1.2920 was a temporary support line in August 2018.
Selling GBP/USD Scenario
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Tradable Negative Trigger: -1.3363 deviation (2.6345%) [SELL Pair]
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Fundamental Support Level: 1.2725
If it comes out lower than expected at a relative deviation of -1.3363 or less (2.6345 or lower in actual terms), the GBPUSD may go down reaching a range of 44 pips in the first 15 minutes and 85 pips in the following 4 hours.
1.2725 was the low point on August 10th. 1.2650 was a pivotal line in mid-2017. Further down, 1.2600 is a round number and also stabilized the pair back in the spring of 2017.
GBP/USD Levels on the Chart
More data
As in other developed economies, the UK is enjoying a surge in employment. However, employers are not competing for employees, at least not enough to push salaries higher. Higher wages later translate into higher inflation, higher interest rates, and a stronger pound.
In the last five releases, the GBPUSD moved, on average, 9 pips in the 15 minutes after the data release and 37 pips in the following 4 hours. The previous release had no surprise.
Follow the publication of the figure on the economic calendar. Watch out for the data from the Market Impact tool, projecting the potential price changes according to the deviation. Here is the Market Impact Studies Users Guide.
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