The currency market is barely moving as traders are gearing up for a portion of key macroeconomic events. The US inflation report is slated for release tomorrow, which would hint on the next possible moves by the Federal Reserve. And the day after tomorrow, the ECB will hold its monetary policy meeting. Naturally, few traders would take risk ahead of such important events. Generally, this is the reasons why the market basically ignored the labor market data from the United Kingdom. Meanwhile, the UK unemployment level increased to 4.3% from 4.2%. Still, some figures sparked traders’ interest. It was the average earnings report that showed an annual increase of 7.8%, rising to 617 pounds per week. This result matched the reading of the previous period, hitting the highest level on record. What does it mean? It means that higher income would lead to higher spendings, which, in turn, would spur consumer price growth. So, the inflation pace is expected to accelerate again. Obviously, the released statistics may prompt the Bank of England to raise interest rates, despite the fact that some members of the Monetary Policy Committee believe high rates negatively affect the British economy. In fact, the eurozone is also witnessing sluggish business and manufacturing activity due to harsh monetary policy stance. Market participants anticipate that the European Central Bank will put rate hikes on hold at its meeting on Thursday. As for the technical picture, the euro-dollar pair has rebounded from the key area of 1.0650/1.0680 that is seen as the support zone. Still, this partial recovery did not have much impact on the euro exchange rate, so the downward trajectory is likely to continue. A further decline will be possible if the price dips below 1.0650. In such a case, the bearish pressure is likely to intensify with the next downward target lying at 1.0500. The pound-dollar pair pulled back to the area above 1.2500. However, this move did not alter the prevailing sentiment in this pair. If the price returns to the area below 1.2450, it would trigger a new round of sell trades and lead to a sustainable downward cycle in the market.
As for a bullish scenario, traders see a possibility of a partial recovery of the British pound if the price holds above 1.2550. In such a case, the next upward targets would be found at 1.2650-1.2700.

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00:00 INTRO
00:25 QUOTES
00:46 UK AVERAGE EARNINGS EXCLUDING BONUSES, Y/Y
01:25 BOE INTEREST RATE
01:41 ECB INTEREST RATE
02:00 EUR | USD
02:38 GBP | USD