Pound dips after UK Jobs data
Sterling fell below 1.3300 handle after UK jobs data. Positive signal from surprise fall in jobless claims (-2.8K in August vs 0.6K rise forecast and downward revised July figure from -4.2K to -2.9K) and Unemployment falling to 4.3% (the lowest since 1975) was offset by weak figures in Average Earnings (2.1% in July vs 2.3% forecast) which shows that pay growth is still subdued.
Jobs data sours overall positive view of the UK economy which was greatly boosted by upbeat inflation numbers on Tuesday.
Cable pulled back to the session low at 1.3274, but so far stays above initial support at 1.3268. Overall picture remains bullish and favor dip-buying for fresh upside action, with weaker than expected overall UK jobs sector outlook after today’s data, to likely speed up corrective action signaled by overbought daily studies.
We see a higher base at 1.3158 (also near Fibo 38.2% of 1.2905/1.3328 upleg) as ideal support to contain extended dips before larger bulls resume.
Res: 1.3300; 1.3328; 1.3385; 1.3400
Sup: 1.3268; 1.3224; 1.3200; 1.3158