GBP/USD Forecast Ahead of the UK Employment Data

Summary:

GBP/USD is on a decline ahead of the UK employment data. The US inflation data has exerted pressure on the pair despite Fed's dovish tone.

GBP/USD has erased some of Wednesday’s gains as investors now shift their focus to the UK jobs data. In the previous session, the UK CPI numbers boosted the pound. However, the lower-than-expected UK producer prices, coupled with the higher US PPI figures, exerted pressure on the pair.

Economists expect the UK unemployment rate in May to remain unchanged at 4.7%. As for the average earnings index, including bonus, the forecasted reading of 7.1% is higher than the previous month’s 5.6%.

However, the expected employment change of 90,000 is lower than the prior 113,000. The data comes a few days before the full reopening of the UK economy on 19^th July.

GBPUSD technical outlook

GBP/USD is on a decline as the UK jobs data. The currency pair is down by 0.23% at 1.3829. It is finding support at the resistance-turn-support level of 1.3824. On a two-hour chart, it is trading below the 25 and 50-day exponential moving averages.

If the UK employment numbers come in higher-than-expected, GBP/USD is likely to get a boost past its current resistance level of 1.3842, which is along the 50-day EMA. If that happens, it will clear the path towards Wednesday’s high of 1.3898 and higher at the prior resistance level of 1.3913.

On the flip side, the key support levels to watch are the psychological level of 1.3800. Below that point, the bears will be targeting July’s low of 1.3730.