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

UK Jobs report overview

Early Tuesday, the UK’s Office for National Statistics (ONS) will release the October month Claimant Count figures together with the Unemployment Rate in the three months to September at 07:00 AM GMT. Although Brexit, coronavirus (COVID-19) and US election headlines are likely to 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 September, to rise from the previous 0.0% to 1.1%, while ex-bonuses, the wages are seen improving from 0.8% to 1.1% during the stated period.

The number of people seeking jobless benefits, namely the Claimant Count Change, is expected to increase from 28K previous to 36K in October. Further, the ILO Unemployment Rate may pick up from 4.5% to 4.8% during the three months ending in September.

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 buyers attack 1.3200, up 0.23% intraday, ahead of Tuesday’s London open. In addition to the US dollar’s fresh weakness, mainly based on the challenges to the risk-on mood, the increasing hopes of soft Brexit, as the UK’s House of Lords rejected a proposal to have the right to edit the Brexit treaty, also favor the bulls. That said, recently positive comments from BOE Governor Andrew Bailey, rejecting the odds of a double-dip recession, offer additional strength to the Cable buyers.

Even so, neither the European Union (EU) nor the UK agrees over the much-awaited post-Brexit trade deal and the second national lockdown weighs on the economy that marked contraction in the last quarter. Hence, any further weakness into the headline employment data will provide extra challenges to the GBP/USD bulls before propelling them beyond 1.3200.

Technically, bullish signals from the MACD joins strong RSI, not near the overbought region, favor the GBP/USD buyers to keep the optimism while targeting a resistance line stretched from September 10, at 1.3246 now. In doing so, a clear break above the recent high of 1.3208 becomes necessary. Alternatively, a downside break of 5-day SMA, currently near 1.3120 will aim for the 1.3100 and the 1.3000 round-figures as the next rest-points before highlighting a multi-day-old support line close to 1.2890.

Key notes

GBP/USD Forecast: Brexit returns to the limelight

GBP/USD Price Analysis: Bulls struggle near two-month top, 5-day SMA offers immediate support

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).