The Pound Sterling (GBP) surged to a 29-month high against the US Dollar (USD) before facing a pullback, driven by various economic factors and geopolitical tensions. The GBP/USD pair experienced a rollercoaster ride throughout the week, influenced by key events and data releases.
The Rise and Fall of Pound Sterling
GBP/USD reached a high of 1.3266, propelled by dovish comments from US Federal Reserve Chairman Jerome Powell and weakening USD. The Fed’s indication of an upcoming rate cut boosted GBP’s momentum, but the tide shifted as Atlanta Fed President Raphael Bostic hinted at delaying the cut, triggering a correction.
Additionally, tech stock sell-offs and concerns over ECB’s rate cut further supported USD, leading to GBP/USD retreat from multi-year highs. The release of US second-quarter GDP data and anticipation of US Nonfarm Payrolls also influenced the pair’s movement.
Upcoming US Employment Data
As the US observes Labor Day, focus shifts to key US employment data releases, including ISM Manufacturing PMI, JOLTS Job Openings, and Nonfarm Payrolls. These reports will impact market sentiment and GBP/USD movement in the holiday-shortened week.
Technical Outlook for GBP/USD
Despite recent corrections, GBP/USD remains bullish, with potential resistance at 1.3250 and 1.3266. A pullback could test support levels at 1.3045, 1.2959, and 1.2894, but the overall trend favors buying opportunities. Monitoring RSI levels and key resistance points will be crucial for traders.
Understanding Nonfarm Payrolls (NFP)
Nonfarm Payrolls are a vital component of the US jobs report, influencing Federal Reserve decisions and USD performance. High NFP figures signal economic strength, impacting inflation, monetary policies, and interest rates. NFP’s correlation with USD and Gold prices highlights its significance in global markets.
Stay tuned for the latest updates on GBP/USD as economic data and geopolitical events continue to shape market dynamics.