GBP/USD approaches 4-year high as UK jobs data shows cooling labor market

GBP/USD is testing multi-year highs despite UK employment data revealing a cooling labor market, highlighting the complex dynamics driving sterling strength. The latest UK jobs report showed signs of labor market softening, with unemployment ticking higher and wage growth moderating from previous elevated levels. However, the pound continues to benefit from broad dollar weakness and expectations that the Bank of England will maintain relatively higher interest rates compared to other major central banks. The approach to four-year highs near 1.3500 represents a significant technical milestone, with traders watching for either a breakout or resistance-driven reversal. The cooling labor market data may actually support further GBP gains by reducing pressure on the BoE to hike rates aggressively while maintaining the UK's yield advantage. Key support levels sit at 1.3400 and 1.3350, while a break above 1.3500 could accelerate gains toward 1.3600.