- GBP/USD has seen a notable recovery, surpassing the 1.3500 mark.
- The US dollar is starting the week on a weak note, dropping to several-week lows.
- The US market will be closed on Monday for Labor Day.
The British Pound (GBP) rebounded quickly from some earlier setbacks on Friday and stabilized as Monday rolled around, pushing GBP/USD above the 1.3500 threshold.
GBP/USD sets sights on 1.3600
The resurgence in GBP purchases appears to be linked to the dollar’s increased weakness, which has seen the US Dollar Index (DXY) fall below the 98.00 support level, a drop that began in late July.
Looking ahead, investors are gearing up for an eventful week on the US economic calendar. The labor market is expected to take center stage amid growing speculation about possible interest rate cuts from the Federal Reserve later this year.
In the UK, there’s general expectation that the Bank of England (BOE) won’t alter its policy rate during the meeting on September 18. However, implied fees hint at a potential reduction of about 25 basis points by March 2026.
Simultaneously, market participants will need to be cautious regarding fiscal conditions in the UK. Members of the Treasury Committee are eager to connect with BOE rate setters later this week for insights into potential cuts and any adjustments to the bank’s quantitative tightening strategy.
What’s on the UK calendar?
Technical landscape
If GBP/USD manages to surpass the August high of 1.3594 (achieved on August 14), it could clear the ceiling set back in 2025 at 1.3788 (from July 1). Beyond that, the next resistance is noted at 1.3834 (October 20, 2021).
On the flip side, initial support lies at a weekly low of 1.3390 (recorded on August 22), followed by further support levels from August at 1.3141 (August 1) and from May at 1.3139 (May 12).
