GBP/USD Price Analysis: Upbeat UK Jobs Boost Pound

• The GBP/USD price analysis shows a surging pound.

• The UK claimant count increased by 5,200, well below forecasts of 22,300.

• China and the US announced a 90-day pause in tariffs.

The GBP/USD price analysis shows a surging pound after data revealed a smaller-than-expected increase in UK unemployment claims. At the same time, sterling gained due to dollar weakness. After Monday’s rally, market participants are locking in profits ahead of pivotal US inflation figures. 

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Data on Tuesday revealed that the UK claimant count increased by 5,200, well below forecasts of 22,300. The miss is a sign that the labor market is faring far better than expected. As a result, the pound recovered from its previous session lows. However, other elements like wage growth and employment levels showed cracks that could put pressure on the Bank of England to lower borrowing costs. 

The pound also gained as the dollar paused its rally. On Monday, China and the US announced a 90-day pause in tariffs. The news boosted the dollar as it briefly ended the trade war between the two countries. At the same time, it eased worries about a US and global recession. 

However, by Tuesday, all focus returned to US economic data. The CPI report will contain clues on future Fed rate cuts. Upbeat numbers will lower rate cut expectations. On the other hand, downbeat figures might pressure the central bank to lower borrowing costs. 

GBP/USD key events today

• US core CPI m/m
• US CPI m/m
• US CPI y/y

GBP/USD technical price analysis: Bulls aim to retest the 1.3251 key level

On the technical side, the GBP/USD price has made a bearish breakout, ending a period of consolidation. The price now sits below the 30-SMA, with the RSI below 50, suggesting a bearish bias. However, after the breakout, bulls have returned to retest the recently broken range support.

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Initially, the price maintained a sideways move between the 1.3251 support and the 1.3401 resistance levels. While this happened, the RSI made a bearish divergence, showing bulls were getting weaker each time they retested the range resistance. As a result, bears became strong enough to breach the range support. 

If the 1.3251 level holds firm as support, the price will likely fall to the 1.3050 level, strengthening the bearish bias. Otherwise, it will return to the consolidation area.

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