GBP/USD Price Forecast: Pound Crashes on 5.2% Jobless Shock – Is $1.3500 Next?
During the European trading session the GBP/USD pair kept sliding , and it eventually slipped below the 1.3600 level...
Quick overview
- The GBP/USD pair fell below the 1.3600 level, reaching an intra-day low of 1.3552 due to disappointing UK labor market data.
- The UK unemployment rate rose to 5.2%, its highest in nearly five years, while wage growth slowed, indicating potential challenges for consumer spending.
- The US dollar is gaining traction as a safe haven amid global economic uncertainty, putting additional pressure on the GBP/USD pair.
- GBP/USD is currently testing crucial support at $1.3560, with bearish trends suggesting potential further declines if sellers break below $1.3550.
During the European trading session the GBP/USD pair kept sliding , and it eventually slipped below the 1.3600 level. It hit an intra-day low of 1.3552 but that was largely due to some really disappointing UK labour market figures for December. As a result the expectations are now that the Bank of England will ease up on monetary policy in its March meeting – which puts extra pressure on the British pound and is therefore contributing to the losses in the GBP/USD pair.
Pound Takes a Hit Following Shocking Weak UK Labour Data
A bit later in 2025 than we thought, it turned out that the UK labour market showed an unexpected dip in performance. Not great news on the data front – the ILO Unemployment Rate suddenly jumped up to 5.2% in the three months to December – its highest level in nearly five years and a bit higher than most people were expecting at 5.1%. Also, the Claimant Count Rate leapt up to 28.6K in January , after only a tiny 2.7K rise in December – obviously not a good sign. Meanwhile employment growth actually slowed down, coming in at only 52K last month compared to 82K previously.
Wage growth also showed signs of cooling off – with Average Earnings Including Bonus only rising 4.2% year on year in the last quarter of 2025, which is actually below where a lot of people were forecasting at 4.6% – and a bit lower than the 4.6-4.8% we were seeing a little while ago.
That suggests to us that UK households may not have as much cash to spend as they thought , which could slow consumer spending and have a knock on effect on the wider economy.
GBP/USD Faces Headwinds as the Dollar’s Status as Safe Haven Keeps Gaining Traction
Meanwhile in the US, the dollar has been doing rather well- thanks to the safe-haven effect that is kicking in amid the current climate of global economic uncertainty . Lots of people are expecting interest rate cuts from the Fed later this year, but the dollar is still managing to attract investors looking for a safe place to put their money – which is putting extra pressure on GBP/USD.
And to top it all off, market players are going to be on high alert this week because of some key events ahead of us. Though most of the focus is on the FOMC minutes later in the week.
GBP/USD Price Forecast: Descending Trendline Weighing on $1.3560 Support
GBP/USD is currently trading just above the crucial support line at $1.3560 on the 2-hour chart. The price is creeping up against the rising trendline at $1.3550 – and the pair is coming up against a descending trendline from the high of $1.3730 a few days ago – all of which is pointing to a tightening triangle formation and is a sign of potential compression.
After breaking through the horizontal support at $1.3592 the pair has now dropped below both the 50-period Exponential Moving Average at $1.3633 and the 200-period Exponential Moving Average at $1.3622 – indicating a short term bearish trend. Recent candlesticks are showing very bearish looking bodies, followed by smaller consolidation candles – which is suggesting that sellers are still in the picture but the momentum is starting to fade near support.
Immediate resistance is $1.3592 and then $1.3654 while if sellers manage to break below $1.3550 then $1.3508 and potentially $1.3459 will be in their sights. On the other hand, if buyers manage to defend the trendline, then a rebound towards $1.3650 is still a possibility.
Trading idea: Consider selling if you can get below $1.3550 , and target $1.3508 – with a stop loss above $1.3600.
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