GBP/USD Outlook: UK Unemployment Steady at 4.1% with 23.7K Jobless Claims

The UK’s latest employment data offers a mixed picture of economic conditions. The unemployment rate held steady at 4.1%, matching expectations and showing resilience despite other economic challenges.

However, the claimant count change reported 23.7K new unemployment claims, a sharp improvement from the forecast of 95.5K and much lower than the previous 102.3K, signalling a possible cooling in job losses.

Meanwhile, the Average Earnings Index showed wages growing at 4.0%, slightly underperforming the expected 4.1%, but still reflecting a tight labour market.

This employment data has provided some relief to the GBP/USD pair, which recently bounced off support at $1.3059.

GBP/USD: UK unemployment, earnings to give clues on services inflation slowdownhttps://t.co/4qg5xHAPgM $GBP #BOE #fx #trading pic.twitter.com/Ni32aSPzG1

— David Scutt (@Scutty) September 10, 2024

Market participants are now evaluating whether this recovery will gain momentum, especially as traders await upcoming economic events and data releases that could influence sentiment further.

GBP/USD Technical Analysis

Despite the bounce, GBP/USD continues to trade below its 50-day Exponential Moving Average (EMA), which sits at $1.3132, reinforcing a bearish short-term outlook.

The pair’s Relative Strength Index (RSI) has climbed to 36.91, emerging from oversold conditions, which hints at potential buying momentum. Immediate resistance for the pair is located at $1.3170, a key level where the 50% Fibonacci retracement aligns with prior highs.

GBP/USD may retest $1.3207 if there is a sustained move above this level, and then there may be a run in the direction of $1.3288. However, failure to break this resistance will likely see renewed selling pressure.

The first significant support on the downside is at $1.3059, and stronger support is at $1.3020. If these levels fail to hold, the next target would be $1.2975, which could open the door for deeper losses.

Key Levels and Indicators to Watch

• Immediate Resistance: $1.3170
• Next Resistance: $1.3207, $1.3288
• Immediate Support: $1.3059
• Next Support: $1.3020, $1.2975
• RSI: 36.91 (recovering from oversold levels)
• 50 EMA: $1.3132 (bearish below)

Looking at the #GBPUSD on the monthly time-frame , currently looking to take long positions (scaling in positions) upon the retest of the recently formed daily/weekly/monthly demand zone , potential spike to the downside to retest the previously formed inner 1hr/4hr demand zone,… pic.twitter.com/W1zx8xyM0u

— THE CHOSEN ONE🎑 (@fx_margin_call) September 9, 2024

Conclusion

While GBP/USD is showing early signs of recovery, the pair remains in a technically precarious position. The UK labour market data has provided some short-term relief, but broader concerns about global economic stability and currency volatility linger.

Traders should remain cautious, as a break above $1.3170 could indicate a bullish shift, while continued trading below this level suggests further downside risks.

In the coming sessions, the pair’s reaction to key technical levels, particularly the 50-day EMA, will be crucial in determining the next major move.