GBPUSD goes through the roof alongside wages

Today's jobs data will be great news for the BOE and government. There looks to be real confidence coming into wage growth now and we are in a definite trend. If inflation carries on rising and consumer spending picks up then the hawks are going to start getting very excited

Some already are as BOE rate expectations, as predicted by the MPC SONIA index futures, have pulled forward expectations for the first hike in 2016 to June from August

The labour market is looking very rosy. There are now 31.05m in employment, +114k on the quarter. Of that 22.74m are in fulltime work and that's up 362k against a year ago. Part time workers totalled 8.31m +63k y/y

The pound has needed no excuse to rally recently and this is just more fuel for that fire. 1.5735 has been a prior S&R point and it's where this latest rally paused for breath before hitting a new high at 1.5745. If we can manage to keep the momentum going then 1.5785 becomes the next target ahead of a look at the April tip-toe into 1.5800

GBPUSD daily chart

It's been a fair old jump up after the data so we could see a sizeable move lower on this run before finding decent support. 1.5720 looks to be choice for that right now followed by 1.5200 and 1.5680/90. If we move below those numbers then this rally will likely fizzle out pretty swiftly.

EURGBP has continued to find sellers and 0.7110/15 remains the nearest level I want to see broken before thinking about having a look at the year's lows

EURGBP daily chart

This report is one that the BOE and government will be jumping all over and if the rest of the economy picks up just as smartly over the next few months those rate expectations are going to come screaming closer. I suspect that the BOE will wait until the Fed raises first before laying out their plans but we might well be entering the realm of seeing the MPC hawks start voting for hikes again. Ian McCafferty and Martin Weale are the big hawks on the MPC and the likely candidates to vote for hikes first, like they did last year. It's something we should be very aware of at next month's MPC minutes if the data picks up further and it will be another bullish moment for the pound

UK wages have the BOE hawks watching

The FOMC is going to have a big say in the next big move for the pound but it also presents a very big opportunity to get into a decent dip in the quid if they are hawkish. This could be one of those trades where the news goes against the current trend in the pound and gives a second chance for those that have missed this move. I'm going to be looking to grab some further longs if we get a decent dip over the FOMC