Early Tuesday, the UK’s Office for National Statistics (ONS) will release the October month Claimant Count figures together with the Unemployment Rate in the three months to September at 07:00 AM GMT. The UK labor market report is expected to show that the average weekly earnings, including bonuses, in the three months to September, to rise from the previous 0.0% to 1.1%, while ex-bonuses, the wages are seen improving from 0.8% to 1.1% during the stated period.

The number of people seeking jobless benefits, namely the Claimant Count Change, is expected to increase from 28K previous to 36K in October. Further, the ILO Unemployment Rate may pick up from 4.5% to 4.8% during the three months ending in September.

And according to a report, Retail sales jumped last month ahead of the second national lockdown in England, which retail leaders have warned will “throwaway” recent progress for troubled high street stores. The BRC-KPMG retail sales monitor for October revealed that total sales increased by 4.9% for the month, as some shoppers completed their Christmas shopping earlier than usual.

“October saw another month of strong sales growth, with food, gifts, and loungewear high on people’s shopping lists,” said Helen Dickinson, chief executive of the British Retail Consortium (BRC)

US dollar’s fresh weakness, mainly based on the challenges to the risk-on mood, the increasing hopes of soft Brexit, as the UK’s House of Lords rejected a proposal to have the right to edit the Brexit treaty, also favor the bulls. That said, recently positive comments from BOE Governor Andrew Bailey, rejecting the odds of a double-dip recession, offer additional strength to the Cable buyers.

Even so, neither the European Union (EU) nor the UK agrees over the much-awaited post-Brexit trade deal and the second national lockdown weighs on the economy that marked contraction in the last quarter. Hence, any further weakness into the headline employment data will provide extra challenges to the GBP/USD bulls.

GBP/USD 4 Hour Chart:

Support: 1.3102 (S1), 1.3065 (S2), 1.3012 (S3).

Resistance: 1.3192 (R1), 1.32445 (R2), 1.3281 (R3).

Amidst all the catalysts supporting pound against dollar, we expect a bullish trend for GBP/USD.