GBP/USD Forecast: Mixed UK employment data failed to underpin Pound

Valeria Bednarik FXStreet

GBP/USD Current price: 1.2563

UK unemployment rate steady at 3.9% in the three months to April.
Inflation in the UK seen growing at an annual rate of 0.5% in May.
GBP/USD is holding within familiar levels, bullish potential fading.

The GBP/USD pair peaked this Tuesday at 1.2687, holding on to gains after the release of mixed UK employment data, to later fell amid renewed demand for the greenback. According to the Office for National Statistics, the ILO unemployment rate in the kingdom held at 3.9% in the three months to April, beating expectations of 4.5%. On a down note, the number of people claiming jobless benefits rose by 528.9K in May, worse than anticipated, while the April reading was upwardly revised to 1032.7K. The claimant count rate jumped to 7.8% vs. 5.8% previously.

This Wednesday, the UK will publish May inflation data. The Consumer Price Index is foreseen at 0% when compared to the previous month, while the annual reading is expected at 0.5%.

GBP/USD short-term technical outlook

The GBP/USD pair is trading near a daily low of 1.2552, with the bearish potential increasing as the day comes to an end. The 4-hour chart shows that the pair is crossing below a bearish 20 SMA, although still above the larger ones. Technical indicators, in the meantime, have entered negative ground, but lack strength enough to confirm a bearish continuation.

Support levels: 1.2525 1.2470 1.2410

Resistance levels: 1.2605 1.2650 1.2695

View Live Chart for the GBP/USD

Author

Valeria Bednarik

FXStreet

Valeria Bednarik was born and lives in Buenos Aires, Argentina. Her passion for math and numbers pushed her into studying economics in her younger years.

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