UK Jobs report overview
The UK labor market report is expected to show that the number of people seeking jobless benefits increased by 2.3k in the three months to Oct, compared to an increase of 1.7k booked in the three months to Sept.
The unemployment rate is expected to remain unchanged at 4.3% during the period. Average weekly earnings, including bonuses, in the three months to Sept, are expected to come in a tad weaker at 2.1%, while ex-bonuses, the wages are seen ticking slightly higher to 2.2% versus 2.1% previous.
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 between 20 and 60 pips in deviations up to 2 to -4, although in some cases, if notable enough, a deviation can fuel movements of up to 85 pips.
How could affect GBP/USD?
A positive surprise in the claimant count combined with higher average earnings could lift Cable back above 1.32 handle. On a poor outcome, we could see the GBP/USD pair stall its recovery mode and head back towards 1.3100 mark.
Technically, “Below 100-day SMA, currently near the 1.3115 region, the 1.3050 level should continue to offer strong support, which if broken should accelerate the slide towards a short-term descending trend-line support near the key 1.30 psychological mark. Alternatively, a clear break through the 1.3200 handle might trigger a short-covering bounce towards the 1.3300 handle, which if conquered might negate any near-term bearish bias and pave way for extension of the pair's upward trajectory in the near-term,” Haresh Menghani, Analyst at FXStreet writes.
“We’re in line with the BoE though looking for it to slip to 4.2% before the end of the year. For wage growth, we’re a tenth below consensus in looking for a small dip to 2.0% y/y in September, before picking up again into year-end. Private sector pay should look a bit stronger at 2.4% y/y.”
About UK jobs
The Claimant Change released by the Office for National Statistics (ONS) presents the number of unemployed people in the UK. There is a tendency to influence the GBP volatility. Generally speaking, a rise in this indicator has negative implications for consumer spending which discourage economic growth. Generally, a high reading is seen as negative (or bearish) for the GBP, while a low reading is seen as positive (or bullish).
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