• GBP/USD fell sharply on Tuesday after UK data showed unemployment hit a five-year high in December and wage growth slowed, strengthening the case for additional rate cuts by the Bank of England.
• Britain’s unemployment rate climbed to 5.2% in Q4 2025 from 5.1% in the previous three months, marking the highest level since 2020 and, excluding the COVID-19 period, the highest since 2015.
• Annual wage growth excluding bonuses eased to 4.2% in the three months to December, down from 4.4% previously.
• Investors increased bets on a quarter-point rate cut by the Bank of England to around 80%, up from 65% on Monday following the data.
• The Bank of England held interest rates at 3.75% earlier this month but more policymakers voted for a cut than analysts had expected.
• Immediate resistance is located at 1.3627(Daily high), any close above will push the pair towards 1.6359(38.2% fib)
• Strong support is seen at 1.3501 (50% fib) and break below could take the pair towards 1.3449(Lower BB).
Recommendation: Good to sell around 1.3540 with stop loss of 1.3600 and target price of 1.3480
