Morning Note: UK Job Weakness Meets Rising Oil Hopes from China US Talks

UK job numbers are out this morning and they are not the best

This morning, at 06:00 GMT, we have received the UK job numbers for April:

• Unemployment jumps from 4.5% to 4.6%. This has been in line with the initial expectations, however, it is a second increase in a row, which is indicating a slowing jobs market in UK. In a YoY basis, the number of people unemployed for both up to 12 months and over 12 months increased. Last time the reading was that high was back in August 2021.
• The average earnings excluding bonuses have fallen to +5.2% from +5.5%, on YoY basis. Wage growth slowed sharply for the private sector (5.1% vs 5.5%). The figure has been moving in a downward trajectory since February 2025.
• Employment change came out at 89k, versus the previous 112k. This reading has also started slowing down since February 2025. The current number is indicating a decline in full-time and self-employed labor.
• The Bank of England continues to monitor UK’s job numbers, as it sets its monetary policy. Next week, on the 19th of June, the BoE will be deciding on its interest rate. During the previous meeting in May, the Bank had cut its rate, but given today’s lower figures, there could be a chance for another cut in June.

GBPUSD technical outlook

Looking at the technical picture of GBPCAD, we can see that the pair has been on an uptrend since September 2022. Also, the rate continues to trade above a medium-term upside support line taken from the lowest point of January 2025.

In order to continue aiming further north, a break of the current highest point of this year, at 1.8778, would be needed. This way, a forthcoming higher high will be confirmed, possibly inviting more bulls into the field. That’s when we will target the 1.9128 territory, marked by the highest point of June 2016.

Alternatively, to start aiming lower, a break of the previously mentioned upside line would be required. Such a move would confirm a change in the direction of the current trend, potentially opening the door to some lower areas. That’s when we will aim for the 1.8287 obstacle, a break of which might set the stage for a move to the 200-day EMA, or even the 1.7985 zone. That zone is marked by the lowest point of April.

China-US trade talks continue

From the end of last week, crude oil prices continue to drift higher, fueled by positive news that has been coming out from the China-US trade talks.

• The market is carefully monitoring the continued talks between China and the US, as the two sides are still trying to reach an agreement. This week the negotiations continue in London, and so far, we are seeing positive feedback. If a deal of some sort is reached, this could reflect positively on different asset classes, including commodities. That’s where oil prices might jump. That said, we have seen such talks falling apart before, meaning that we are not getting too optimistic ahead of time.
• Iraq is currently pumping slightly less oil, in order to compensate for earlier overproduction. That said, there are concerns that certain members of the OPEC+ group might start increasing production later on in the summer. Also, a possible Iran-US deal could allow Iranian oil back into the free market, meaning oversupply may be inevitable.

Brent oil technical outlook

From the beginning of June, Brent oil has been pushing higher, while trading above a short-term upside support line taken from the lowest point of May. That said, at the same time, the commodity remains below a medium-term downside resistance line, drawn from the highest point of January 2025. Although we have been seeing some recent positivity in the price action, we remain cautiously bearish due to the fundamental headwinds, which are facing this “black gold”. However, for now we will remain sidelined and wait until we see a clearance of one of the trendlines.

A break below the short-term upside line could signal that the medium-term trend remains strong and could lead the price to some lower areas again. That’s when we will aim for the 62.13 obstacle, or even for the current lowest point of this year, at around 58.44 level.

A break of the medium-term downside line could attract more buyers into the game, possibly clearing the way higher. We will then aim for the 72.39 hurdle, or even for the 75.43 area. That area is marked by the highest point of April.

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Past performance is not indicative of any future results. This information is provided for informative purposes only and should not be construed to be investment advice.