The UK labor market has shown that unemployment rate matched the forecast. But, the most most critical element was the average earning which has spiked up. The data came in at 2.7% and investors consider this music to their ear.
The fact is if you want domestic inflation to pick up, one of the ways to see that is through wage growth in the private sector because with more money in the consumer’s pocket, they tend to spend more, which pushes the inflation figure. However, the overall inflation figure is still well below the BOE target and this will remain the key factor.
The overall effect is very positive for the GBP/USD pair. The resistance is near the 1.2812 level and the support is near 1.5259.