**GBP/USD Dips to Intra-day Low on Soft UK Employment Data**
*Based on the original article by FxWirePro, Econotimes*
The GBP/USD currency pair experienced significant weakness during the most recent trading session, touching fresh intra-day lows as market sentiment soured on the back of disappointing UK employment figures. The soft data undermined the British pound’s short-lived rally and reignited concerns about the country’s economic trajectory ahead of key central bank decisions.
#### Overview of the GBP/USD Movement
At the opening of the European session, GBP/USD traded near 1.4140, having staged a cautious climb during the early hours. However, the release of UK labor market data quickly reversed the pair’s gains, pushing it to lows not seen since the previous week.
– The pound slipped against the dollar as investors digested the numbers.
– Selling intensified after the employment statistics failed to meet market expectations.
– The currency pair found initial support around the 1.4100 handle.
– Downside pressure persisted throughout the London session.
#### Disappointing UK Employment Data
The primary catalyst for the pound’s weakness was the release of the latest UK jobs report. This dataset revealed a slowdown in the recovery of Britain’s labor market, highlighting persistent vulnerabilities and raising concerns about the sustainability of recent economic gains.
Key points from the employment report included:
– A lower-than-expected increase in employment figures for the most recent quarter.
– A rise in the unemployment rate, marginally above consensus forecasts.
– Lackluster wage growth, suggesting the labor market is not tightening as quickly as hoped.
– Continued strain in certain sectors, especially hospitality and travel, due to lingering pandemic restrictions.
Economists were quick to note that while the jobs market is in a better place than during the height of the lockdowns, progress appears to be stalling. For investors and traders, the disappointing figures cast doubt on the pace at which the Bank of England (BoE) might consider tightening monetary policy, a key driver for sterling’s value.
#### Market Reaction and Sentiment
The release of the UK employment data triggered a marked response in currency markets. The pound’s retreat was compounded by a surge in the US dollar, which benefited from a generalized risk-off ambiance.
– UK government bond yields ticked lower, reflecting diminished expectations for near-term BoE tightening.
– Investors repositioned by cutting long positions in sterling and increasing exposure to safer assets like the US dollar and Japanese yen.
– FX strategists cited the labor data as a “wake-up call” for those betting on a rapid UK recovery.
Risk sentiment also weighed on the GBP/USD pair as global stock indices wobbled amid signs that the post-pandemic rebound may be losing steam in several major economies.
#### The Technical Picture
Before the employment numbers, technical analysts noted that GBP/USD had briefly pierced resistance levels but failed to maintain upward momentum. The subsequent selloff pushed the pair below key moving averages and onto a path toward further weakness.
Technical highlights:
– The pair was rejected around the 1.4170-1.4180 resistance zone.
– Support is now seen at 1.4100, with stronger demand at 1.4050.
– The 50-day moving average is converging toward current prices, magnifying downside risks if selling persists.
– Technical momentum indicators have turned south, with the Relative Strength Index (RSI) retreating from overbought territory to neutral-bearish.
Market participants are watching closely for a potential close below the 1.4100 mark, which could trigger more aggressive selling and set the stage for a test of the psychological 1.4000 level.
#### Economic Backdrop and Bank of England Policy
The Bank of England has recently signaled a willingness to consider tapering asset purchases and eventually hiking rates, but only if data supports a robust, sustainable recovery. The latest jobs report is likely to temper such ambitions, at least for the coming weeks.
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