Premium Watchlist Recap: U.K. Employment Report (September 2025)

The U.K. jobs figures turned out to be a major disappointment early in the week, as the economy shed 25.8K positions in September while the jobless rate ticked higher from 4.7% to 4.8%.

How did GBP react, and which among our watchlist setups yielded the best trading opportunity?

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We’re breaking down our GBP setups this week and how each pair performed after the downbeat U.K. employment release amid flip-flopping market sentiment.

The Setup

What We Were Watching: U.K. Claimant Count Change for September 2025

• The Expectation: U.K. economy projected to have lost 12K jobs in September, following earlier 17.4K increase in claimants, enough to keep jobless rate steady at 4.7%.
• Data outcome: Claimant count jumped 25.8K while the unemployment rate rose to 4.8%.
• Market environment surrounding the event: The main focus was on flaring trade tensions between the U.S. and China, as both countries exchanged tariff threats while markets still held on to some cautious optimism for a possible Trump-Xi meeting.

Event Outcome

The U.K. employment report painted a grim picture of the labor market, as the claimant count surged sharply by 25.8K and brought the overall jobless rate up to its highest level since May 2021.

The report also partly reflected the impact of higher National Insurance contributions and increased minimum wages implemented earlier in 2025, as the average earnings index improved from an upgraded 4.8% to 5.0% for the three-month period ending in August.

Key Takeaways:

• Unemployment rate jumped to 4.8% in June-August 2025, up from 4.7% in the previous quarter and well above 4.1% a year ago
• Claimant count surged by 25,800 in September to 1.692 million, far exceeding forecasts of 10,300
• Regular wage growth (excluding bonuses) slowed to 4.7% year-on-year, while total pay rose 5.0%
• Job vacancies fell to 717,000 in July-September, marking the 39th consecutive quarterly decline
• Payroll employment dropped by 10,000 m/m, with an annual decline of 93,000

Fundamental Bias Triggered: Bearish GBP setups

Broad Market and Exogenous Drivers:

Monday–Tuesday: Spotlight on US-China Trade Spat

After last Friday’s dramatic selloff on Trump’s tariffs tantrum, markets staged a major risk rebound on Monday when the U.S. President tried to assure that everything will be fine when it comes to China. However, some degree of anxiety remained, as gold extended its advance to record highs on resurfacing global trade uncertainty.

Risk rallies retreated early the next day when China announced new port fees on vessels owned, built and operated by the U.S. but Trade Representative Greer touted a possible Trump-Xi meeting that once again stoked some cautious optimism.

Midweek: Market Correlations Mix-Up

Traditional risk correlations appeared to break down midweek, as investors grappled with persistent uncertainties, including the ongoing U.S. government shutdown, dovish Fed expectations, and elevated trade tensions.

Gold once again struck fresh record highs above $4,200 on sustained safe-haven demand while U.S. stock indices managed to catch a bullish wave on upbeat earnings results, particularly in the financial sector. Crude oil also got a brief boost from U.S. Treasury Secretary Bessent’s remarks on a potentially longer tariff truce between the U.S. and China.

U.K.-specific concerns mounted after BOE Governor Bailey and Finance Minister Reeves both highlighted fiscal challenges ahead of the autumn budget. Bailey warned about “difficult choices” while Reeves signaled spending restraint, adding another layer of pressure on Sterling sentiment even before the employment data hit.

Thursday–Friday: Risk Wobbles on Regional Bank Selloff

Risk aversion peeked back in the markets on Thursday, as the spotlight turned to a couple of regional banks that disclosed major credit concerns, overshadowing the upbeat U.S. earnings season.

And guess what was up, up, up in this moment like everyone’s favorite K-pop earworm? That’s right, gold! The precious metal was shinin’ like it’s born to be, climbing above the $4,300 level, while crude oil remained under pressure from global trade jitters.

The flight to safety also boosted government bonds, triggering a corresponding drop in yields, as global markets struggled to find a foothold amid the prolonged delay in U.S. official data releases. The market mood still remained in flux, though, as the political deadlock in France and Trump’s commentary on how China’s tariffs are “not sustainable” briefly boosted the safe-haven dollar.

GBP/USD: Bearish Event Outcome + Risk-Off Scenario

= Arguably good odds of a net positive outcome

Given the U.K. jobs outcome and the level of negativity and uncertainty in the broad market environment to potentially push traders towards safe havens, after the U.K. event, the GBP/USD watchlist looked like it had the best odds of supporting a net positive outcome, as the Greenback tends to outperform the euro in net negative environments.

Initially, the watchlist setup (both fundies and technical arguments) played out as anticipated with GBP/USD quickly falling from the identified resistance area around 1.3350-1.3370 (Pivot Point and 50% Fib) after the event. The pair fell to within a few pips of the S1 Pivot Point at 1.3244 (also previous swing low), where it quickly fond support just a few hours after the event.

Unfortunately for this setup, USD weakness dominated sentiment in the pair in the latter half of the week due to U.S.-China trade developments, and U.S. regional banking worries, pushing the pair well beyond technical resistance arguments, to the R1 Pivot resistance area before finding a top for the week.

So, the setup’s profitability ultimately depended on trade management strategy & execution, likely only benefitting those took action right after the U.K. jobs release, and actively managed the trade with aggressive risk reduction / profit taking management strategies. For everyone else (e.g., sell-and-hold, scale-in shorts, or waiting for a higher price), the outcome was highly likely a net negative one.

Not Eligible to move beyond Watchlist – Bullish GBP Setups and EUR/GBP Setup

EUR/GBP: Bearish Event Outcome + Risk-On Environment

EUR/GBP 1-Hour Forex Chart by TradingView

While the U.K. jobs update outcome did support the long EUR/GBP bias from the watchlist, the broad market environment did not align, therefore invalidating a long EUR/GBP setup from moving forward to the next stage of the trading process. 

Despite not being valid, EUR/GBP did responded exactly as the watchlist anticipated to the weak UK data as the pair broke higher, extending toward the 0.8720 – 0.8730 target zone outlined in the original analysis, an area that held as resistance for the rest of the week.

EUR/GBP maintained its range, likely due to the fact that both currencies faced their own fundamental challenges. The euro dealt with French political & fiscal concerns, while Sterling grappled with the employment shock, creating a more balanced dynamic in the pair.  The fundamental drivers created a prime environment for ranging strategies to likely do well in.

GBP/CHF: Bullish GBP Event Outcome + Risk-On Environment

GBP/CHF 1-Hour Forex Chart by TradingView

The original GBP/CHF symmetrical triangle upside breakout idea was invalidated by downbeat U.K. jobs data, as the numbers triggered a break below support instead. From there, the pair hovered below the pivot point level as risk-off flows appeared to favor the lower-yielding franc midweek, before a pop back up to R1 (1.0731) took place.

The R1 resistance zone continued to hold as a ceiling, a prime jump off point for GBP/CHF sellers when UK-specific fiscal and economic concerns popped up and broad risk-off sentiment grew. For those paying attention to how fundamentals developed and shifted biases on GBP/CHF to the short side, where the fundamentals made sense for both currencies to expect a move lower, this was a solid opportunity and likely net positive outcome.

EUR/GBP: Bullish GBP Event Outcome + Risk-Off Scenario

EUR/GBP 1-Hour Forex Chart by TradingView

Since the U.K. jobs figures came in below expectations, the watchlist idea for a short setup was invalidated. We already discussed the price action and market drivers in the long setup discussion above. So the only thing we’d like to say additionally here is that based on the event outcome, traders could have adjusted both their bias and strategy, and potentially have taken the long bias opportunity on the 16th, where the pair saw support then bullish reversal. This was a solid range play setup with both fundamental and technical arguments aligned, and it would have likely resulted in a net positive outcome, if targeting the top of the easily identifiable resistance area.

The Verdict

GBP/USD was arguably the most viable setup for the week given the target event outcome, and the relatively risk-off broad market environment on Tuesday. 

The U.K.’s employment shock supported our bearish GBP watchlist scenarios, with both GBP/USD and EUR/GBP setups initially performing as expected. The unemployment surge to 4.8% and massive claimant count miss created clear fundamental catalysts for Sterling weakness that aligned perfectly with the identified technical levels.

However, ultimate profitability depended entirely on trade management discipline & counter currency selection. GBP/USD delivered its full technical target from resistance to S1 support but reversed sharply on Thursday’s risk rally due to significant U.S. Dollar weakness in the latter half of the week.

Given the mixed outcomes – strong initial moves but challenging exits for GBP/USD – we rate the watchlist discussion as “Neutral-Not Likely” supportive of net positive outcomes. The setup required precise timing (shorting right after the event outcome) and active risk management to capture profits before broader market forces overwhelmed the employment data impact.

Key Takeaways:

Magnitude Matters in Data Shocks

The employment report didn’t just miss expectations – it shattered them. The unemployment rate jumping to a 4-year high while claimants more than doubled forecasts created an unambiguous bearish catalyst. When data deviates this dramatically from consensus, initial market reactions tend to be swift and sustained, at least temporarily.

Application: Look for setups where potential data surprises align with technical levels. The GBP/USD resistance confluence and EUR/GBP breakout setup both benefited from clear technical validation when the fundamental shock hit.

Mid-Week Reversals Require Defensive Positioning

Both successful GBP/USD and EUR/GBP’s setups saw their profits threatened or erased by late-week risk-on reversal. This recurring pattern in 2025 – where end-of-week positioning flows overwhelm earlier fundamental moves – demands adaptation.

Application: For event-driven trades early in the week, consider taking partial profits at technical targets rather than holding for extended moves. The current market environment rewards nimble profit-taking over position trading.

Counter Currency Narratives Matter

At the end of the week, GBP/CHF was the pair that actually performed the best as a short Sterling vehicle among the three chosen, as the U.S. dollar had significant challenges due to daily dynamic trade headlines, and the franc benefited from the risk aversion environment sparked by U.S. regional banking issues.

Application: Broad market headlines and catalysts could shift a currency’s role in how traders use it and react in the short-term. Be wary of the main market drivers and observe how they’re influencing safe haven’s like USD, CHF, & JPY, then take that into consideration when choosing a counter currency and choosing the likely scenarios ahead to plan out for.