GBP/USD Price Hits $1.3537 Wall After CPI Miss—Here’s What Traders Expect Next

The British pound steadied near $1.3517 on Wednesday after bouncing from early lows, but the rally lacked momentum as traders digested...

Written by: Arslan Butt • Wednesday, June 11, 2025 • 2 min read

• Last updated: Wednesday, June 11, 2025

Quick overview

The British pound steadied near $1.3517 after a bounce from early lows, but the rally lacked momentum due to softer U.S. inflation data.
The UK unemployment rate rose to 4.6%, the highest since 2021, raising expectations for a Bank of England rate cut as early as August.
Improving global trade sentiment provided brief relief for the pound, but weak domestic labor market data continues to weigh on its outlook.
Technically, GBP/USD faces resistance at 1.35370, and failure to break this level may lead to a bearish shift in the near term.

The British pound steadied near $1.3517 on Wednesday after bouncing from early lows, but the rally lacked momentum as traders digested softer-than-expected U.S. inflation data. Core CPI rose just 0.1% in May, undershooting the forecast of 0.3%, while headline inflation came in at 2.4% year-on-year, slightly below estimates. The subdued CPI report cooled bets on immediate Fed tightening but didn’t ignite a full risk rally either.

While the U.S. Dollar Index (DXY) hovered near 99.00, market sentiment stayed cautious. Inflation remains sticky enough to keep the Fed on hold, and political uncertainty surrounding tariffs still looms over the longer-term rate path. In short: no rate cuts yet, but no urgency to hike either.

Pound Supported by Trade Talks, Hit by Jobs Data

The sterling found brief relief from improving global trade sentiment. U.S. and Chinese negotiators signaled progress in London, suggesting some tariffs may be eased in the coming weeks. This offered a modest boost to risk appetite across markets.

But on the domestic front, things aren’t as bright. The UK unemployment rate climbed to 4.6%, the highest since 2021, according to ONS data. Analysts point to April’s hike in employer National Insurance contributions (from 13.8% to 15%) as a drag on hiring. The weak jobs print, coupled with softer wage growth, has ramped up Bank of England (BoE) rate cut expectations. HSBC analysts now expect a rate cut as early as August.

Key concerns for the pound:

Weak labor market report
Rising unemployment and lower wage pressure
Elevated BoE easing odds
Thursday’s GDP and factory output data may confirm the slowdown

GBP/USD Technical View: Resistance Rejection

Technically, GBP/USD is at a crossroads. The pair was rejected from a major resistance zone at 1.35370, where:

GBP/USD Price Chart - Source: Tradingview — GBP/USD Price Chart – Source: Tradingview

A descending trendline capped upside
The 50-EMA at 1.35102 served as dynamic resistance
Price failed to close above horizontal resistance

The MACD is barely positive, and the long upper wick signals seller control. If bulls can’t break above 1.35658, a pullback to 1.34552 or 1.34186 is likely.

Key levels to watch:

Resistance: 1.35370, 1.35658
Support: 1.34940, 1.34552, 1.34186

Conclusion:

The pound faces a mix of optimism and pressure—easing global trade tensions are offset by weak UK data and inflation uncertainty. If GBP/USD fails to clear 1.35370, the near-term outlook shifts bearish, with key supports likely to be tested.

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ABOUT THE AUTHOR See More

Arslan Butt

Lead Markets Analyst – Multi-Asset (FX, Commodities, Crypto)

Arslan Butt serves as the Lead Commodities and Indices Analyst, bringing a wealth of expertise to the field. With an MBA in Behavioral Finance and active progress towards a Ph.D., Arslan possesses a deep understanding of market dynamics. His professional journey includes a significant role as a senior analyst at a leading brokerage firm, complementing his extensive experience as a market analyst and day trader. Adept in educating others, Arslan has a commendable track record as an instructor and public speaker. His incisive analyses, particularly within the realms of cryptocurrency and forex markets, are showcased across esteemed financial publications such as ForexCrunch, InsideBitcoins, and EconomyWatch, solidifying his reputation in the financial community.