Pound Tumbles As UK Jobless Rate Increase

Fundamental Analysis

* Jobless Surge: The pound has slid against the dollar after disappointing UK employment data. The Office for National Statistics (ONS) revealed that the ILO Unemployment Rate rose to 4.3% in the three months ending in August, up from 4.0% and exceeding forecasts of 4.1%. During this period, UK employers added 219,000 jobs, significantly lower than the previous figure of 373,000. The Bank of England (BoE) has been closely monitoring wage growth, a key contributor to inflationary pressures in the service sector, to guide interest rate decisions. Following this weaker data, traders are now leaning slightly toward another 25 basis point (bps) rate cut in the BoE’s December meeting. Last week, the BoE also cut its key borrowing rate by 25 bps, indicating a preference for a more measured approach to policy easing.

Technical Analysis

* Technical Breakout: GBPUSD was traded lower following prior breakout below the previous support level 1.27950. MACD which illustrate strong bearish momentum signal suggest the pair to likely further extend its losses.

* Resistance and Support: If the bearish momentum persists, there’s a strong likelihood that the price will potentially head towards the level 1.26700. Conversely, a potential reversal is also to be expected and the price could head back towards 1.27950.

Understand how technical analysis can help you in this trading opportunity.

Potential Risks

Looking ahead, investors will closely watch key U.S. economic data releases, including CPI, PPI, and Retail Sales this week for further direction and insights into economic momentum.

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Monitoring

Stay updated on US and UK data, central bank updates and any shifts in the US Dollar’s strength by following PU Prime’s market insights and daily financial news.

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Disclaimer: Trading derivatives involves high risks, and market conditions can change rapidly. The content is for informational purposes only and should not be considered as financial advice. Traders should conduct their own research and consider risk management strategies.