Mixed Performance by the Pound After Weaker Job Data

Group 1: Job Market Overview - The British job report for November-December showed mostly negative numbers, with HMRC payroll change reaching its lowest monthly figure in over five years [2] - Payroll changes have been consistently negative for most of 2025, indicating a significant slowdown in the job market, although it may be premature to declare a clear acceleration in this trend [3] - The unemployment rate in Britain remained at its highest in over four years at 5.1%, driven significantly by longer-term unemployment [4][5] Group 2: Inflation Trends - Annual headline inflation in Britain rose slightly more than expected in December to 3.4%, influenced by increases in alcoholic drinks, tobacco, and transport [6] - The persistence of inflation above 3% for three quarters complicates the outlook for potential rate loosening by the Bank of England [7] Group 3: Currency Movements - The pound has gained against the dollar and yen while declining against most other major currencies, as traders price in potential cuts by the Bank of England in 2026 [1] - The euro has gained strength due to a pause in tensions between the USA and EU, while the pound faced pressure from a weaker job report despite higher inflation [9] Group 4: Technical Analysis - The downtrend on lower timeframes since November has paused, with a strong gain observed on 20 January and an upward crossover of the slow stochastic in oversold conditions [10] - The value area around 87.3p is testing potential dynamic resistance, with 88p identified as a potential static zone of resistance [10]