GBP/USD retreats from highs as UK employment data disappoints

GBP/USD pulled back 0.4% to 1.2720 after reaching weekly highs near 1.2780, as disappointing UK employment figures dampened sterling sentiment. UK jobless claims increased by 23,000 in May, significantly above the expected 8,000, while the unemployment rate edged higher to 4.3%. Wage growth also showed signs of cooling, with average earnings excluding bonuses rising 5.9% year-over-year, down from 6.1% previously. The weaker labor market data reduces pressure on the Bank of England to maintain restrictive monetary policy, with markets now pricing a 65% chance of a rate cut by September. Technical analysis shows GBP/USD breaking below the ascending trendline from May lows, with immediate support at 1.2700 and resistance at 1.2750. The dollar index strengthened marginally as traders rotated back into USD ahead of upcoming US inflation data.