- The GBP/USD pair has bounced back from a low of 1.3332 to reach 1.3442 as the US dollar softens following a strong rally earlier this week.
- The latest US JOLTS report points to a notable drop in job openings for July, underscoring concerns about employment and manufacturing performance.
- The UK services PMI surged to 54.2, alleviating some financial worries, although Bank of England officials are still raising alarms about inflation risks and policy focus.
During the North American trading session, GBP/USD rose by 0.39% after the release of various economic data from the US. There seems to be a slight easing of concerns regarding the UK government’s ability to meet fiscal demands, as indicators suggest the economy continues to function. After recovering from a daily low of 1.3332, the pair is now trading at about 1.3442.
Sterling recovers 0.39% following positive UK services data
According to the US Dollar Index (DXY), the dollar has weakened after its rally earlier in the week. The labor market data indicates a drop in job openings for July to 7.81 million, down from 7.437 million in June, according to the Bureau of Labor Statistics (BLS).
Moreover, employment saw an increase of 41,000, while layoffs climbed to 12,000. Economists have criticized the ongoing impact of tariffs from US President Donald Trump as contributing to the slowdown in the job market.
Additional data revealed a 1.3% decline in factory orders for July, slightly better than the anticipated 1.4% contraction. This aligns with the ongoing trend of shrinking manufacturing activity, which has now contracted for six consecutive months according to the ISM Manufacturing PMI report released on Tuesday.
Investors will be closely watching the upcoming non-farm payroll figures. Estimates suggest a creation of about 75,000 jobs in August, which could affect unemployment rates.
Across the pond, the UK’s strong services PMI has eased concerns regarding the government’s financial management ahead of the forthcoming fall budget. The S&P Global Services PMI rose to 54.2 in August, marking the highest point since April 2024, up from 51.8 in July.
Some Bank of England (BOE) officials have made notable comments. Governor Bailey mentioned he does not think quantitative tightening is the cause of rising bond yields, asserting that inflation expectations remain aligned with targets. He expressed worry about potential risks related to downside trends in employment.
Meanwhile, BOE Governor Taylor voiced concerns about maintaining stable inflation near the 2% mark and suggested he might reconsider monetary policy restrictions if warranted.
GBP/USD Price Prediction: Technical Analysis
GBP/USD has recovered from its weekly low of 1.3332, managing to surpass 1.3400. This opens up potential testing of resistance at the 100-day SMA around 1.3450. Should this level be breached, traders may then look to test the 20-day SMA at approximately 1.3483 and the 50-day SMA at around 1.3484. There’s also a notable resistance level around 1.3500.
Conversely, if the pair closes below 1.3400, it could lead to a revisit of the September 3rd low at 1.3332, with the next target being the psychological support level at 1.3300.
Pound Sterling Price Changes This Week
This week, the British pound has shown varying performance against major currencies listed below. Notably, the pound experienced its strongest performance against the Japanese yen.
| USD | EUR | GBP | JPY | CAD | AUD | NZD | CHF | |
|---|---|---|---|---|---|---|---|---|
| USD | 0.15% | 0.38% | 0.73% | 0.40% | -0.06% | 0.16% | 0.43% | |
| EUR | -0.15% | 0.23% | 0.50% | 0.24% | -0.21% | 0.00% | 0.28% | |
| GBP | -0.38% | -0.23% | 0.18% | 0.03% | -0.42% | -0.21% | 0.11% | |
| JPY | -0.73% | -0.50% | -0.18% | -0.26% | -0.76% | -0.52% | -0.25% | |
| CAD | -0.40% | -0.24% | -0.03% | 0.26% | -0.44% | -0.23% | 0.09% | |
| AUD | 0.06% | 0.21% | 0.42% | 0.76% | 0.44% | 0.22% | 0.56% | |
| NZD | -0.16% | -0.00% | 0.21% | 0.52% | 0.23% | -0.22% | 0.32% | |
| CHF | -0.43% | -0.28% | -0.11% | 0.25% | -0.09% | -0.56% | -0.32% |
This heatmap illustrates how major currencies are changing relative to one another. The selected base currency appears on the left column, while the comparative currencies are listed across the top.
