UK jobs report to show steady wage growth
The monthly jobs report from the UK will be released later today at 0930 GMT. Economists polled are expecting to see the UK’s unemployment rate remain steady at 4.8%, while wages are also expected to rise 2.8%, a steady pace since the previous month. Following yesterday’s inflation report, the jobs report today will show if there are any signs of wage inflation pressures which will be seen as a positive for the British pound.
The UK jobs report from the Office for National Statistics will be closely watched as economists are expecting to see no change to the pace of wage growth
Yesterday, the UK's inflation report showed that the headline consumer prices in the nation rose only 1.8%. Although inflation accelerated from 1.6% previously, it was shy of the forecasts of 1.9%. This sent the GBP briefly lower on the slower build up of consumer prices.
If today's jobs report shows any evidence of increase in wages, it would be seen as a positive as wage inflation could see influencing consumer prices and thus supports the case for a Bank of England's rate hike.
The BoE had previously signaled that it will not hesitate to hike interest rates if there is evidence that wage inflation was building. However, the central bank said that so far there was no evidence of the same. The UK wages have been rising at a pace of 2.8% on a steady pace for the past month.
How we trade binary?
The one-hour chart for EURGBP is showing prices consolidating into a bearish flag pattern. This indicates a continuation to the downside. However, we expect a near term retracement towards 0.8500 which previously held out as support before being breached yesterday.
A retest to 0.8500 off a bounce from 0.8471 support will signal this level being tested for resistance ahead of further declines. Therefore, look to purchase daily PUT options near 0.8500 for a 21:00 GMT expiry on a bearish continuation of the trend in EURGBP.
Target price: 0.8500
Expiry: 21:00 GMT