GBPUSD Faces Major Obstacle at 1.30 after UK Employment Data

GBPUSD has lost 4 cents in October after a swift reversal above 1.34, but sellers are facing strong support right at 1.30 for the 3rd week.

Skerdian Meta•Tuesday, October 15, 2024•2 min read

GBPUSD has lost 4 cents in October after a swift reversal above 1.34, but sellers have been facing strong support right at 1.30 for the 3rd week. That’s a major round level, with the 200 SMA also standing there on the weekly chart, which used to act as resistance, so it is acting as support now.

The UK labour market report for August

Although the GBP/USD pair gained about 8 cents throughout August and September, the trend now seems to be shifting from bullish to bearish. For this reversal to be confirmed, sellers need to break through key levels, including the purple 200 SMA on the weekly chart, which has so far held as support.

GBP/USD Chart Weekly – The 200 SMA Is Still Holding

Yesterday, most major currencies pulled back against the USD, but the GBP/USD pair held steady, indicating some resilience in the pound. On the USD side, recent economic data has been favorable, signaling a solid recovery. In contrast, the UK economy continues to show signs of weakness, with declining earnings. Earlier today, the UK released its employment report for August, shedding more light on the economic landscape.

UK September Employment and Earnings Report

UK August ILO Unemployment Rate:
- Reported at 4.0%, slightly better than the expected 4.1%
- Previous rate was 4.1%
Employment Change:
- Surpassed expectations at 373k, compared to the forecast of 250k
- Prior reading was 265k
Average Weekly Earnings (including bonus):
- Increased by 3.8%, just above the expected 3.7% for the 3 months year-over-year
- Previous figure was 4.0%, revised up to 4.1%
Average Weekly Earnings (excluding bonus):
- Met expectations at 4.9% for the 3 months year-over-year
- Previous reading was 5.1%
September Payrolls Change:
- Declined by 15k
- Previous change was -59k, revised to -35k

The August employment report showed a slight improvement, but payroll figures indicate that the UK unemployment rate continues to decline. Given the erratic trend in the unemployment rate, interpreting this data remains challenging. As always, the ONS highlights the uncertainty surrounding their estimates. In addition, real wages have been falling over the past three months, signaling a slowdown in pay growth. This trend likely provides some reassurance to the Bank of England regarding inflation concerns.

GBP/USD Live Chart

GBP/USD

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Skerdian Meta

Lead Analyst

Skerdian Meta Lead Analyst. Skerdian is a professional Forex trader and a market analyst. He has been actively engaged in market analysis for the past 11 years. Before becoming our head analyst, Skerdian served as a trader and market analyst in Saxo Bank's local branch, Aksioner. Skerdian specialized in experimenting with developing models and hands-on trading. Skerdian has a masters degree in finance and investment.