UK jobs preview: What to expect of GBP/USD?

GBP/USD remains sliglhty offered and continues to move back and forth around 1.31 handle, with the recovery unable to gain further traction as cautious tone prevails in the markets ahead of the UK employment data.

The UK labour market report from the Office for National Statistics will be published at 8.30GMT this Wednesday.

Wages to inch higher in May

Markets predict another 60,000 rise in employment in the quarter ended May. This should leave the unemployment rate at its current level of 5.0%.The headline average annual earnings growth is seen rising from 2.0% to 2.4%. However, the three-month average rate excluding bonuses is expected to remain stagnant at 2.3%.

Limited reaction is expected on the UK jobs release, as the data is likely to be reported for the pre-Brexit period (May) and hence, will be largely ignored by the markets, even on a positive outcome.

GBP/USD: Key technical levels to watch on UK data

Haresh Menghani, Analyst at FXStreet believes, “The pair has just managed to hold 61.8% Fibonacci retracement level support of post-Brexit recovery at 1.3065-60 region but is seen struggling to build on to its recovery move above 1.3100 handle. Any follow through buying interest now seems to confront resistance at 50% Fibonacci retracement level near 1.3145-50 area.” 

“On the flip side, weakness below 61.8% Fibonacci retracement level support near 1.3065-60 area should now open room for a break below 1.3000 psychological mark and force the pair to aim towards 1.2900 handle before heading further towards a major support near 1.2850 region.”