Sterling was pushed around by counter currency flows last week, but can it find some direction this time with the jobs report coming up?
Here’s what market watchers are expecting:
U.K. jobs report
- December claimant count change to show 40K increase in joblessness
- Average earnings index to rise from 2.7% to 3.0% for three-month period ending in November
- Unemployment rate to rise from 4.9% to 5.1% in November
- Weaker than expected results would confirm that the U.K. was hit harder by the latest round of tighter lockdown restrictions and Brexit uncertainty
- Note that last week’s flash PMI readings came in way below expectations, reflecting the sharpest rate of contraction since May last year and a drop in employment activity
Technical snapshot
- Stochastic suggests that most sterling pairs are in for declines, with GBP/CHF and GBP/NZD also inching towards bearish territory
- EUR/GBP is seeing oversold conditions based on this indicator
- The pound has been most volatile against the Loonie and Kiwi in the past week, moving an average of 109.5 pips per day, followed by the Aussie at 96.2 pips
