UK Jobs report overview
Early Tuesday, the UK’s Office for National Statistics (ONS) will release the December month Claimant Count figures together with the Unemployment Rate in the three months to November at 07:00 AM GMT. Although the coronavirus (COVID-19) updates and news on the US fiscal stimulus can keep the driver’s seat, the recent doubts over whether the BOE is geared towards the negative rates or not highlight the importance of today’s employment day for GBP/USD traders.
The UK labor market report is expected to show that the average weekly earnings, including bonuses, in the three months to November, grew from the previous 2.7% to 2.9%, while ex-bonuses, the wages are seen improving from 2.8% to 3.1% during the stated period.
The number of people seeking jobless benefits, namely the Claimant Count Change jumped to 64.3K in November, expected +35K for December, whereas the ILO Unemployment Rate suggests a further improvement in the employment data from 4.9% to 5.1% during the three months ending in November.
Deviation impact on GBP/USD
Readers can find FX Street's proprietary deviation impact map of the event below. As observed the reaction is likely to remain confined around 20-pips in deviations up to + or -2, although in some cases, if notable enough, a deviation can fuel movements over 60-70 pips.
How could they affect GBP/USD?
GBP/USD stands on a slippery ground near 1.3650, down 0.13% on a day, while heading into the London open on Tuesday. Although the recent recovery in the US dollar index (DXY) mainly due to the risk-off mood, have favored the cable sellers, cautious sentiment ahead of the key UK events also might have played their role to please the bears.
It’s worth mention though that the UK’s virus conditions recently improved and Health Minister Matt Hancock sounds optimistic, after many days, during this latest speech. However, the British government still mulls closing borders and compulsory quarantines for foreigners and hence virus woes keep sterling sellers hopeful. Alternatively, expected delay in the US covid stimulus and a further tension between American and China could add to the US dollar’s strength, indirectly challenging GBP/USD bulls.
As a result, the GBP/USD buyers will need strong employment prints to defy the recent pullback moves and the greenback strength.
Technically, normal RSI conditions and sustained trading beyond 200-bar SMA favor GBP/USD buyers inside a three-week-old rising wedge bearish chart pattern. However, a one-week-old symmetrical triangle between 1.3655 and 1.3710 teases intraday traders.
Key notes
UK Jobs Preview: Another positive surprise? GBP/USD could use a shot in the arm
GBP/USD Price Analysis: Stays inside rising wedge on 4H ahead of UK jobs report
GBP/USD stays below 1.3700 amid risk aversion, UK employment report in focus
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).
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