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

FXStreet (Mumbai) - The GBP/USD pair hit a high of 1.5186 in Asia today after battling bears during the European and the early NY session on Tuesday. The immediate focus is now on the UK labor data – unemployment and wage growth numbers.

Focus on wage growth numbers

The unemployment and wage growth numbers is on the most important data sets in the UK. The growth in the average hourly earnings excluding bonus is seen slowing in three months to September, while including bonus, the number is seen rising. A strong figure could overshadow the employment figures and take the GBP/USD pair above 1.52 handle.

Meanwhile, the unemployment rate could attract attention from the markets in case the figure prints below the expectation of 5.4%. Moreover, the drop in the jobless rate points to labor market tightening; something that can push up inflation. However, the BOE is of the opinion that the labor market tightening accompanied by a rise in the productivity does little to push up inflation.

Consequently, the major focus is likely to be on the wage growth figures. A weak figure would be enough for the bears to push the pair back to 1.51 levels.

GBP/USD Technical Levels

At 1.5170, the immediate support and resistance is located at 1.5138 (23.6% last week’s fall) and 1.5206 (38.2% of last week’s fall). A better-than-expected wage growth number could trigger a break above 1.5206 and open doors for a rally to 1.5248 (50% of Apr-Jun rally). On the other hand, a weak data could lead to a break below 1.5138 and lead to a re-test of 1.5087 (61.8% of Apr-Jun rally).

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