- The GBP is bracing for UK wage figures early in the Europe session, the 'trigger figure' for rate hikes from the BoE.
- Unemployment, claimant change figures also hit at the same time, and the Sterling is poised for a bull run if the numbers can hold.
The Sterling is holding steady at Monday's highs near 1.4340 heading into the European session, with UK Average Earnings in the barrel for 08:30 GMT.
GBP/USD Preview: breaking new ground as it looks for 1.44 ahead of UK jobs
Today sees Average Earnings both with an without bonuses, forecast at 3.0 and 2.8 percent respectively, compared to the previous readings of 2.8 percent and 2.6 respectively. Also on the docket and dropping at the same time is the ILO 3-month Unemployment Rate, which is expected to hold steady at 4.3 percent, while the Claimant Count Change is expected to decrease from the previous 9.2 thousand to 5 thousand.
UK wage growth is likely to be the deciding factor in a rate hike from the Bank of England (BoE) in May, although the BoE is largely expected to increase rates anyway. Brexit fears have disappeared from the Cable's market presence in recent weeks, as market participants are hopeful that a successful transition deal will be reached between the EU and the UK, despite there being no current signs of a framework close to being finished.
GBP/USD Levels to watch
The Sterling's technical outlook remains on steady footing for this week, and as FXStreet's Chief Analyst Valeria Bednarik noted, "average hourly earnings are expected to have advanced from previous readings, with wages, excluding bonuses, seen up 2.8% in the three months to February. Inflation, on the other hand, is seen decreasing, and both combined should mean decreasing pressure on the BOE to raise rates, which may have a contrarian effect on Pound, sending it lower when macroeconomic data improves. In the 4 hours chart, technical indicators have lost upward strength in overbought levels, with the RSI pretty much consolidating and the Momentum retreating. Nevertheless, and with the pair holding near its daily high, the risk is lean to the upside, with the next big resistance being 1.4345, January's monthly high."
Support levels: 1.4180 1.4150 1.4115
Resistance levels: 1.4295 1.4345 1.4390
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