UK Earnings Coming Up; the Moment of Truth for GBP
Skerdian Meta • 1 min read
As of late, the GBP has been holding up quite successfully. In the second week of the month, GBP/USD broke above 1.3650- although this was a significant resistance level, the focus is now on the 1.40, stretching all the way to 1.41. Yesterday, the level had been breached a few times, however, as the 100 SMA is still in play, this is of little relevance to us.
1.40 has gone, but 1.41 still remains
Over the last couple of weeks, comments about a soft Brexit have fuelled the hopes of buyers.. Today, we are expectant to see real numbers from the real economy. Prices have picked up in the UK, and not just regarding inflation in paper- food and domestic household prices have climbed considerably in the markets.
UK Average Earnings
Have wages gone up? In mid-December, the reading was quite positive as average hourly earnings went up from 2.2% to 2.5%. They have remained around 2.1%-2.2% for many months, however, the date released in December regarding October was quite impressive.
Like December, earnings are expected to stand at 2.5%- this would be positive, and would send GBP/USD above 1.41. If the number is greater, we can expect to see the GBP take off. If, however, the indicator returns to the 2.1%-2.2% region, buyers would surely be discouraged, and we may see a deep pullback lower. The first target would be 1.3650.