Gbpusd drops amid unfavorable UK economic data and rising unemployment concerns

GBPUSD Analysis

Performance after Tuesday
Period	Pct	Chg	Momentum
Tuesday	-0.38%	-52.1 Pips
Week to-date	-0.16%	-21 Pips
June	0.36%	48.7 Pips

Upcoming key events (London Time)

Wed 01:30 PM USD CPI Inflation Rate (12-mth)
Thu 01:30 PM USD PPI excluding Food and Energy sectors (12-mth)

What happened lately

The economic data from the UK presents a bleak picture as of April and May 2025. The Claimant Count Rate remains unchanged at 4.5%, indicating a stagnant number of people claiming unemployment benefits. However, the more critical figures show a negative trend. The ILO Unemployment Rate has increased slightly to 4.6%. Additionally, the employment change decreased significantly to 89K from 112K, suggesting a slowdown in job creation. Average Earnings, both including and excluding bonuses, have also fallen. In April, the former declined to 5.3% from 5.5%, while the latter dropped from 5.6% to 5.2%. Furthermore, the Claimant Count Change saw a substantial increase from 5.2K to 33.1K, revealing a sharp rise in the number of claimants. Lastly, the BRC Like-For-Like Retail Sales for May fell dramatically to 0.6% from 6.8%, pointing to a potential decline in consumer spending.

The effect of this unfavorable economic news on the GBPUSD is already evident, as the exchange rate dropped by 0.38% to 1.34970. This decline reflects the market’s concern about the weakening UK labor market and falling consumer spending, suggesting possible economic struggles ahead. The decreased earnings growth and rising unemployment might lead to reduced consumer confidence and spending power, further weakening the British pound. Furthermore, considering upcoming high-impact events like the US CPI Inflation Rate and PPI excluding Food and Energy sectors, any positive data from the US could exert additional pressure on GBPUSD, potentially leading to further depreciation of the British pound against the US dollar.

Latest from X (Twitter)

Tweets by Office for National Statistics

What can we expect from GBPUSD today?

GBPUSD on Tuesday dropped -0.38% to 1.34970. Price is below 9-Day EMA while Stochastic is falling.

Updated daily direction for GBPUSD looks bearish as the pair posted lower in Tuesday trading session.

Looking ahead for the day, immediate support level is at S1 1.34473 with break below could see further selling pressure towards S2 at 1.33975. To the upside, with the current momentum bearish, we prefer to look at breakout of the recent daily high of 1.35640 as a potential indicator of buying interest. Failure to break the resistance level would continue to echo bearish sentiment. A close below 1.34559 would indicate selling pressure.

For the week to-date, take note that GBPUSD is mixed as compared to the prior week.

Key levels to watch out:

#GBPUSD Trending on Twitter

[custom-twitter-feeds hashtag=”#GBPUSD” num=3 showheader=false]