GBP/USD Surges By Strong UK Jobs Data

Following Tuesday’s strong retail sales and industrial production readings, the GBP/USD pair has fallen back from earlier session’s highs in the 1.3470s and is back trading around 1.3430s.

Earlier during the European trading session, the pair had surged as much as 0.5%, boosted by a strong labour market report that is seen as granting the Bank of England the green light to hike interest rates in December.

The latest jobs report showed employer payrolls growing by 160K in October, thus easing concerns about the post-end of furlough health of the UK labour market that prevented the BoE from hiking rates in November. The pair holds onto gains of about 0.2% on the session and is the best-performing currency within the G10 scope.

While broad USD strength is the main reason why GBP/USD pulled back from earlier highs, technical selling played a role.

GBP/USD appeared to test and reject a descendant trend since the end of October. Whether or not the pair is able to break above this level, and recover, depends on the data of the awaited Wednesday’s October Consumer Price Inflation (CPI) report.