Important events today:

12:30 UTC: USD – Consumer Price Index (CPI)

The GBP/USD pair continues to decline towards the 1.3475 level during Wednesday’s Asian session. The British pound (GBP) is weakening against the US dollar (USD) due to a weaker UK employment report. Later on Wednesday, attention will shift to the US CPI for May.

According to the ONS, the ILO unemployment rate in the UK rose to 4.6% in the three months to April, up from 4.5%, in line with expectations. Meanwhile, the change in the number of jobless claims in May was 33.1K versus -21.2K previously (revised from 5.2K), below the consensus forecast of 9.5K.

Additionally, average earnings excluding bonuses in the UK rose by 5.2% YoY (3M YoY) in April compared to a revised 5.5% in the previous reading. The market forecast was 5.4%. Including bonuses, wages increased by 5.3% for the same period after a revised rise of 5.6% in the quarter to March. The data missed expectations of 5.5%.

These figures indicate that the UK labor market is losing momentum under pressure from tax hikes and minimum wage increases. This may put some pressure on the pound in the near term. “This gradual slowdown in wage growth may calm the Bank of England after last month’s surprise jump in inflation,” said Paige Tao, economist at PwC UK.

Recommendation: SELL 1.3480, SL 1.3510, TP 1.3410