The UK labor market report is expected to show that the average weekly earnings, including bonuses, in the three months to July, are expected to rise by 3.7%, while ex-bonuses, the wages are expected to rise by 3.8% in the reported period.

The number of people seeking jobless benefits increased by 28k in July. The ILO unemployment rate is expected to hold steady at 3.9% during the period.

Haresh Menghani, Analyst at FXStreet explains, "Given that the pair has already broken through a near two-month-old descending trend-line resistance and has also found acceptance above 50-day SMA, the set-up remains tilted in favor of bullish traders. Hence, a follow-through move beyond the 1.2400 round figure mark, towards testing the next major hurdle near the 1.2435-40 region, now looks a distinct possibility. On the flip side, any meaningful pullback now seems to find immediate support near the 1.2300 handle, which is closely followed by support near the 1.2270 region and the mentioned trend-line resistance breakpoint - around the 1.2230-20 region."

UK: Unemployment rate likely to remain unchanged at 3.9% - TD Securities

GBP/USD: Recent advance to continue? - Commerzbank

UK's NIESR sees one in ten chance of a UK recession slump

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).

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