The GBP/USD pair erased further below 1.3150 on Tuesday as the Greenback gained strength in the market. This shift in market sentiment came after US PMI figures failed to meet expectations, raising concerns about a potential US recession. Traders are now closely monitoring US NFP figures to assess the likelihood of a Fed rate cut.
Forex Today: US Data Challenges Prospects of Soft Landing
On Wednesday, the UK data docket is light, with only low-tier final PMI figures for August scheduled. The focus remains on US labor figures, especially after ISM’s US Manufacturing PMI for August fell below expectations. This disappointing data has led investors to reconsider their bullish expectations.
The upcoming US Nonfarm Payrolls (NFP) report on Friday will play a crucial role in shaping market expectations ahead of the Fed’s rate decision on September 18. Market participants are already anticipating a rate cut this month, and Friday’s NFP print will provide further insight into the Fed’s next steps.
GBP/USD Price Forecast
Despite slipping below 1.3150, the GBP/USD pair remains bullish above the 200-day Exponential Moving Average (EMA) at 1.2725. The immediate downside target for shorts is the 50-day EMA above the 1.2900 handle. The pair has been trading near multi-month highs but faces resistance as the Greenback gains momentum.
GBP/USD Daily Chart
Pound Sterling FAQs
The Pound Sterling (GBP) is the official currency of the United Kingdom and the oldest currency in the world. It accounts for a significant portion of global foreign exchange transactions, with key trading pairs including GBP/USD and GBP/JPY. The value of the Pound Sterling is influenced by factors such as monetary policy, economic indicators, and trade balance data.
Overall, the current market conditions indicate a bearish outlook for the GBP/USD pair as the Greenback gains strength and US economic data disappoints. Traders should closely monitor upcoming US labor figures and the Fed’s rate decision for further insights into market trends.