The GBPUSD exchange rate is hovering above a key technical level ahead of UK employment numbers and the US CPI inflation print.
The price of the GBPUSD exchange rate has climbed above the 1.3433 resistance level that marked the high in October 2024. That will be support for further developments and data releases.
The British employment update will come at 2pm HKT on Tuesday, with analysts looking for an upgrade on last month’s 112k jobs added. However, the unemployment rate is expected to rise to 4.6% from 4.5%.
The UK jobs market has been under pressure lately with lower jobs. The UK jobs market grew on an annual basis for a second consecutive month as more companies advertised seasonal roles. But, recent data showed some slowing in average salary increases on a monthly basis.
According to its latest report, vacancies in April rose on a year-on-year basis by 1.02% compared to the same month a year ago. However, vacancies contracted slightly month on month, from 0.95% to 862,876 compared to March.
That was echoed by the National Statistics office, which said that annual growth in average regular earnings (excluding bonuses) stood at 5.6% in the three months to March 2025. This was lower than 5.9% the previous month and the lowest figure since November.
The British pound has been elevated against the dollar due to the recent negative sentiment against the US currency, but there is a risk that the rally will run out of steam.
The week ahead has a US CPI inflation release later on Wednesday, and that can be a pivotal moment for the pair with the Federal Reserve meeting a week later to decide on rates. A weak CPI print could see traders expecting a rate cut in the United States, but Fed Chair Jerome Powell may remain stubborn after recent Trump comments. That would open up the risk of the President removing the Fed’s leader, which is not an easy process.
The trade talks ongoing in London could also affect the GBPUSD as a strong deal between the US and China could spur some dollar buying.
