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

The GBP/USD pair is seen meandering near session lows ahead of 1.30 handle, extending its retreat from 1.3065 region. The cable remains under pressure largely in response to broad based US dollar rebound, while expectations of weaker UK jobs data, also keep the pound undermined against the American dollar.

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

Wages to tick higher in June

UK jobs data is expected to show a slowdown in hiring ahead of Britain’s European Union referendum on 23 June. Markets forecast employers added 153,000 jobs to the economy in the three months to June, compared to 176,000 in the three months to May.

The unemployment rate is expected to remain at 4.9% during the period.  The rate had fallen to 4.9% from 5% in the quarter to May.

Average weekly earnings, including bonuses, in the three months to June are estimated to have grown 2.4% year-on-year, following a 2.3% increase in the previous period.

Analysts at HSBC note, “However, we expect a slight rise in the claimant count in July as firms become more wary of hiring, given increased uncertainty”

According to HSBC forecasts, the UK jobless claims are expected to rise by 9,000 in July following a 400 increase in June. The claimant count rate is predicted to remain at 2.2%.

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

At 1.3022, the pair has an immediate resistance at 1.3050 (psychological levels), above which 1.3094 (20-DMA) would be tested. On the flip side, support is seen at 1.3000 (round figure) below that at 1.2987/58 (10 & 5-DMA).