The UK Claimant Count Change measures the change in the number of people claiming unemployment benefits. Along with the Unemployment Rate indicator, which is released at the same time, it provides a snapshot of the UK employment situation and could affect the direction of GDP/USD.
Update: UK jobless claims rise only 0.7K
Here are the details and 5 possible outcomes for GBP/USD.
Published on Wednesday at 8:30 GMT.
Indicator Background
UK Claimant Count Change is closely monitored, as the indicator is one of the most important economic indicators. A reading which is lower than the market forecast is bullish for the pound.
After an impressive decline in July, the indicator weakened in August, posting a gain of 2.7 thousand. This was a higher reading than the forecast of 1.7 thousand. The estimate for the September report stands at 3.4 thousand.
Sentiment and Levels
The pound has not recovered from the recent “flash crash” and Brexit jitters could push the pound closer to the symbolic 1.20 level this week. The US economy continues to improve, buoyed by a red-hot labor market. A December rate is currently priced at 60%, while the BoE is moving in the opposite direction, with a rate cut likely next month. Thus, monetary divergence continues to favor the greenback. So, the overall sentiment is bullish on GBP/USD towards this release.
Technical levels from top to bottom: 1.2620, 1.24, 1.2120, 1.1943 and 1.1844
5 Scenarios
- Within expectations: 0.0K to 7.0K: In this scenario, GBP/USD could show some slight movement, but it is likely to remain within range, not breaking any levels.
- Above expectations: -3.6K to -0.1K: A drop in jobless claims would mark a positive sign of the health in the British economy and could send the pair above one resistance level.
- Well above expectations: Below -3.6K: In this scenario, two resistance lines could be broken.
- Below expectations: 7.1K to 10.6K: A weak reading could push the GBP/USD downward, with one support level at risk.
- Well below expectations: Above 10.6K: A significant rise in jobless claims could result in GBP/USD breaking below two support levels.
For more on the pound, see the GBP/USD.