• Data revealed a record surge in UK basic wages.

• The UK’s unemployment rate climbed to 4.2% from 4.0%.

• Market estimates suggest a 55% likelihood of the BoE’s benchmark rates reaching 6% in early 2024.

Today’s GBP/USD price analysis is bullish. On Tuesday, the British pound gained ground following data revealing a record surge in UK basic wages. Consequently, this development heightened the Bank of England’s concerns about inflation. The pound marked a 0.12% increase.

Initially, it had risen by as much as 0.28% to $1.2720 after the release of the wage data. Notably, British wages, excluding bonuses, surged by 7.8% compared to the same period the previous year, spanning three months ending in June.

This upturn represented the highest annual growth rate since comparable records were initiated in 2001. Surprisingly, the UK’s unemployment rate climbed to 4.2% from 4.0%. Analysts noted that this wage rise and unemployment could complicate the Bank of England’s decision-making. 

Moreover, pay growth appears poised to surpass the rate of consumer price inflation, projected to slow to 6.8% in July. This is according to upcoming data from the ONS on Wednesday. Meanwhile, market estimates suggest a 55% likelihood of the BoE’s benchmark rates reaching 6% in early 2024, up from their current level of 5.25%. 

Elsewhere, Governor Andrew Bailey remarked earlier that the pace of pay growth exceeded the central bank’s predictions. However, the BoE also hinted that it was nearing a pause in its series of interest rate increases. Bailey and his colleagues might find solace in some indications of a cooling labor market beyond the pay data.

GBP/USD Key Events Today

Investors will now focus on the US, which will release retail sales data. They expect to see a drop in core retail sales and an increase in retail sales in July.

GBP/USD Technical Price Analysis: Bulls Push Above 30-SMA And 1.2701 Resistance.

GBP/USD 4-hour chart

The pound is pushing above the charts’ 30-SMA and 1.2701 resistance level. Bulls took control at the 1.2625 support level with a strong candle that paused at the 1.2701 resistance. The bulls have now gathered enough momentum to go above this resistance. 

Moreover, the RSI has crossed above 50, indicating a stronger bullish momentum. If bulls can close above this resistance zone, the price will likely retest the next resistance level at 1.2803.

https://www.forexcrunch.com/gbp-usd-price-analysis-pound-soars-amid-upbeat-basic-wages/