When are the UK wages and how could they affect GBP/USD?

UK Jobs report overview

The UK labor market report is expected to show that the number of people seeking jobless benefits increased by 10.0k in the three months to August, compared to a gain of 6.2k seen in the three months to July. The ILO unemployment rate is expected to hold steady at 4.0% during the period.

Average weekly earnings, including bonuses, in the three months to July, are expected to remain unchanged at 2.4%, while ex-bonuses also, the wages are seen rising to 2.8% in the reported period versus 2.7% last.     

How could they affect GBP/USD?

A bigger-than-expected growth in the UK’s wages could add legs to the ongoing bullish momentum seen around the pound following the latest Brexit deal-related headlines. The rates could test 1.3088 (classic R1/ Fib R2) on upbeat numbers, in a bid to regain the 1.31 handle. A break above the last, a test of the 100-DMA at 1.3125 remains inevitable.

On a disappointing result, the GBP/USD pair could drop back to the 1.3000 level, below which the immediate supports lie at 1.2974 (5-DMA) and 1.2955 (50-DMA).

Yohay Elam, Analyst at FXStreet explains, the Technical Confluences Indicator shows that the pair is currently mired in a dense area of technical levels. The 1.3035-1.3048  area is the congestion of last week's high, the Simple Moving Average 50-15m, the SMA 10-one-hour, the Bolinger Band 15m-Middle, the Pivot Point one-week Resistance 1, the BB 4h-Upper, the SMA 10-15m, the SMA 5-15m, the 4h-high, the BB 15m-Upper, and last month's high. Overcoming this zone opens the door to surging all the way to 1.3163 which is the meeting point of the Pivot Point one-day Resistance 2 and the PP one-week Resistance 2.”

Key Notes

Political events amongst market movers today – Danske Bank

Market themes of the Day: Rising UK wages are set to support Sterling

GBP/USD Technical Analysis: double curveball on Brexit headlines

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).