BOE Quarterly Bulletin & Tariff Concerns Weigh on Markets: GBP/USD and FTSE 100 Outlook

Market Overview

The British pound slipped to trade around 1.23 after UK labor market data showed a rise in the unemployment rate to 4.4%, surpassing the forecast of 4.3%. Meanwhile, wage growth met expectations at 5.6%, reflecting resilience in private sector earnings but signaling potential inflationary pressures.

The FTSE 100 edged on Tuesday, driven by gains in banking stocks, with Lloyds Bank rising 3.6% following reports of potential government intervention in a key legal case.

Investors are closely watching the upcoming UK public sector net borrowing report and the Bank of England’s quarterly bulletin, which could provide further insights into the central bank’s policy outlook.

Despite the FTSE 100’s gains, concerns over President Trump’s tariff threats on Mexico and Canada continue to weigh on market sentiment. European and U.S. markets remained cautiously optimistic, with the Dow Jones and S&P 500 posting modest gains.

GBP/USD Technical Analysis

GBP/USD is trading at $1.2331, down 0.12%, as the pair struggles below the key pivot point at $1.23595. A descending trendline around this level is reinforcing selling pressure, with repeated rejections confirming bearish sentiment. Immediate support is seen at $1.22300, and a break lower could expose the next key level at $1.20987.

On the upside, resistance lies at $1.23739, with a stronger hurdle at $1.25765. The 50-day EMA at $1.22750 offers short-term support, while the 200-day EMA at $1.24538 suggests a broader downtrend. A breakout above $1.23595 could shift momentum, but for now, sellers remain in control.

FTSE 100 – Technical Analysis

The FTSE 100 is trading at 8550.39, down 0.07%, as it struggles to break above the key pivot level of 8569.9. The index faces strong resistance near this level, reinforced by a descending trendline that has repeatedly rejected upward moves. Immediate resistance stands at 8623.7, with the next hurdle at 8674.6.

On the downside, support is observed at 8464.2, with further declines potentially testing 8383.2. The 50-day EMA at 8388.2 provides a short-term cushion, while the 200-day EMA at 8271.6 suggests broader support.

A decisive move above 8570 could shift momentum in favor of buyers, but for now, the bearish bias remains intact.