FXStreet (Mumbai) - The GBP/USD pair stalled its recovery mode just shy of 1.53 barrier and is now seen gathering pace to pierce through the last at one go. The cable recovered nearly 1 big figure from the UK CPI-led slump and now awaits the UK labour market report for further direction. While broad based US dollar weakness on widespread risk-aversion also keeps the major underpinned.
Looking ahead, the UK jobs data due to be published at 08.30GMT, is likely to be the major market driver for GBP/USD and the GBP crosses this session.
Tightening labour market and rising wages to prompt BOE rate-hike?
The ONS will release the UK labor market figures for August, with markets expecting the jobless rate to have remained unchanged at 5.5%. While the number of new unemployed claiming benefits is expected to decline by 2,100.
Average weekly earnings, excluding bonuses, are seen rising 3% in the quarter to August, from 2.9% seen in July, while earnings with bonuses are forecast to grow 3.1% after 2.9% previously.
Upbeat figures will refuel speculations surrounding the Bank of England (BOE) rate-hike and could prompt BOE Governor Carney to raise rates in Q1 2016, as he sees tightening labour market conditions and wage growth as the two key parameters on which BOE policy tightening rests.
GBP/USD: Could retest 1.54 on bullish data, levels to watch
The major is now attempting the immediate resistance at 1.5300 (round number & 5-DMA), beyond which 1.5344 (200-DMA & Oct 7 High) would be tested on upbeat UK data, opening doors for the 50-DMA resistance located at 1.5372. Should the jobs report disappoint, the price could aim the immediate support at 1.5255/48 (hourly 20-SMA & Today’s Low), a breach of the last would expose 1.5200/1.5198 (psychological levels & Oct 13 Low).
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