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British Pound Latest – GBP/USD Pushes Higher on UK Jobs Data

British Pound Latest – GBP/USD Pushes Higher on UK Jobs Data

Nick Cawley, Senior Strategist


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GBP/USD - Prices, Charts, and Analysis

  • UK wages are robust but inflation means consumers are worse off.
  • Sterling picks up a bid post-release.
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The latest UK Labour Market Report will give the Bank of England (BoE) something to ponder ahead of its February 2 Monetary Policy Meeting. The UK monthly unemployment rate remained steady at 3.7% in November but the average earnings incl. bonus figure rose to 6.4% from a prior month’s 6.1%, the strongest growth rate seen outside of the coronavirus pandemic period. In real terms – adjusted for inflation – pay fell by 2.6%, one of the largest falls since records. Employees may be earning more but they have less in their pockets to spend. According to the Office for National Statistics (ONS),

‘In real terms (adjusted for inflation), in September to November 2022, total pay fell by 2.6% on the year. A larger fall was last seen in February to April 2009, when it fell by 4.5% on the year. Regular pay fell by 2.6% on the year; this is slightly smaller than the record fall we saw in April to June 2022 (3.0%), but still remains among the largest falls we have seen since comparable records began in 2001’.

The combination of super-heated inflation, rising wages, and a strong labour market may well tip the BoE towards hiking rates by more than expected at next month’s MPC meeting. The latest UK inflation numbers are released tomorrow at 07:00 GMT


For all central bank policy decision dates see the DailyFX Central Bank Calendar

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Sterling popped higher post-release with GBP/USD currently around 50 pips higher after the report. The market is starting to further price in expectations that the BoE will need to act forcibly early next month to temper ongoing inflationary pressures and this is now being seen in the British Pound. The overall technical outlook for the pair remains positive with GBP/USD supported by all three moving averages and a 50-day/200-day crossover. The next level of resistance for cable lies just below 1.2300 with the December 14 multi-month high at 1.2448 the longer-term target.

GBP/USD Daily Price Chart – January 17, 2023


Chart via TradingView

Data provided by
of clients are net long. of clients are net short.
Change in Longs Shorts OI
Daily -2% -11% -5%
Weekly 0% 1% 1%
What does it mean for price action?
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Retail trader data show 50.02% of traders are net-long with the ratio of traders long to short at 1.00 to 1.The number of traders net-long is 12.19% higher than yesterday and 14.43% higher from last week, while the number of traders net-short is 0.49% lower than yesterday and 15.57% lower from last week.

We typically take a contrarian view to crowd sentiment, and the fact traders are net-long suggests GBP/USD prices may continue to fall. Traders are further net-long than yesterday and last week, and the combination of current sentiment and recent changes gives us a stronger GBP/USD-bearish contrarian trading bias.

What is your view on the British Pound – bullish or bearish?? You can let us know via the form at the end of this piece or you can contact the author via Twitter @nickcawley1.

DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.