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

The GBP/USD pair rebounds sharply higher post-European open, extended early gains, with the sentiment underpinned by higher commodities’ prices and European equities.

All eyes now remain on the UK labour market report from the Office for National Statistics due for release at 8.30GMT this Wednesday.

Wages to tick down in April

The UK employment data is expected to show the jobless claims change should tick higher to 0 from -2,400 previously. While the unemployment rate in April is expected to remain unchanged at 5.1%.

Wages are expected to continue growing at a notably subdued pace, with the total weekly earnings rising at the quarterly rate of just 1.6% in the three months to April, which would be down from 2% measured in March. Earnings excluding bonuses are estimated to have decelerated to 2% from 2.1%.

The major is likely to get little affected by the UK data and any surprise in the data is expected to have limited reaction on the pound, as the upcoming Fed decision will be the main market moving event for today, while Brexit fears loom.

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

At 1.4167, the pair has an immediate resistance at 1.4200/01 (round number/ 5-DMA), above which 1.4271/81 (daily R2/ 1h 100-SMA) would be tested. On the flip side, support is seen at 1.4100/1.4091 (round figure/ multi-week low) below that at 1.4067 (daily S1).