When is the UK jobs report and how could it affect GBP/USD?

Jobs report for the United Kingdom is slated for release at 6:00 GMT on Tuesday, July 11. GBP/USD has taken out the 1.2850 key resistance after the US Dollar extended weakness on disappointing US Nonfarm Payrolls data and dovish signals from the Federal Reserve policymakers. It remains to be seen if the UK labor market report helps Pound Sterling find a fresh leg higher, which could initiate a meaningful upside toward the 1.3000 level. 

Upbeat employment numbers and hot wage inflation data would justify the BoE’s stance of more tightening ahead, bolstering market expectations of a BoE terminal rate at 6.50%. Speaking at a conference in Aix-en-Provence in France on Sunday, Bank of England Governor, Andrew Bailey, said that "we will bring inflation back to target," and that "we do have some flexibility about how quickly we bring it back to target." Despite, the central bank’s forecasts of a significant slowdown in inflation over the past months, the UK CPI rose 8.7% in May, outpacing estimates of an 8.4% increase. The inflation rate in the country is over four times the BoE’s 2.0% target.

Conversely, the British Pound could see a sharp correction on signs of loosening UK labor market conditions, which could pour cold water on the hawkish BoE outlook. In such a scenario, GBP/USD could pull back toward 1.2700.

Meanwhile, Dhwani Mehta, Asian Session Lead Analyst at FXStreet, offers a brief technical outlook for the GBP/USD pair and explains: “The currency pair is challenging the highest level in 15 months near 1.2875 heading into the UK jobs data release. The gradual ascent in the 14-day Relative Strength Index (RSI) above the midline justifies the GBP/USD advance.”

Dhwani also outlines important technical levels to trade the GBP/USD pair: “On the upside, Pound Sterling buyers now look to recapture the 1.2900 mark, above which the 1.3000 psychological barrier will be tested. Conversely, immediate support awaits at the bullish 21-Daily Moving Average (DMA) at 1.2738, below which sellers will prod the static support near 1.2680. The deeper correction will then expose the 1.2600 round figure.“