Today's data from the UK Office for National Statistics (ONS) showed that Unemployment unexpectedly rose to 3.9% in the January-March period and the highest level in more than a year. More to it, payrolled employment decreased by 136,000 workers in April, registering the first fall since the Covid-19 pandemic. 
GBP/USD came under pressure after the release, since the higher jobless rate could potentially help the Bank of England adopt a less aggressive stance. Furthermore, broader sentiment remains cautious after uninspiring data from China and the lack of progress in regards to the US debt ceiling.
The pair retests the EMA200 (black line) that keeps risk for a fall to 1.2290-73, but sustained weakness past the lower border of the daily Ichimokou Cloud (1.2175-65) has a higher degree of difficulty.
On the other hand, wages remained elevated in the January-March period, at 5.8% (including bonuses) and 6.7% (excluding bonuses), which does not help the central bank's efforts to tame inflation and pause its rate hiking cycle. The Bank of England had raised rates last week and kept the door open to more tightening, while upgrading its inflation and GDP forecasts and lowering those for Unemployment. 
GBP/USD had defended the EMA200 during last week's decline, above which bulls stay at the driver's seat with a shot at new 2023 highs (1.2680), although 1.2948 looks distant at this stage.
Markets now turn to the US for today's Retail Sales and industrial Production data.
Senior Market Specialist
Nikos Tzabouras is a graduate of the Department of International & European Economic Studies at the Athens University of Economics and Business. He has a long time presence at FXCM, as he joined the company in 2011. He has served from multiple positions, but specializes in financial market analysis and commentary.
With his educational background in international relations, he emphasizes not only on Technical Analysis but also in Fundamental Analysis and Geopolitics – which have been having increasing impact on financial markets. He has longtime experience in market analysis and as a host of educational trading courses via online and in-person sessions and conferences.
Retrieved 24 Sep 2023 https://www.bankofengland.co.uk/monetary-policy-report/2023/may-2023