GBP/USD remained below the key level of 1.3200 after a positive close on Thursday, driven by USD selling pressure. The upcoming release of August labor market data by the US Bureau of Labor Statistics is eagerly awaited by investors, who anticipate a 160,000 increase in Nonfarm Payrolls.
The recent ADP report showed a lower-than-expected private sector payroll increase of 99,000 in August, causing the USD to weaken and allowing GBP/USD to climb. The market is now focused on the BLS data release, with expectations of a rise in Nonfarm Payrolls.
The cooling US labor market has raised speculation of a significant Fed rate cut in September. Current market sentiment suggests a 43% chance of a 50 bps rate reduction. A disappointing NFP reading could further weaken the USD, while a positive surprise may bolster its valuation.
Technical Analysis of GBP/USD
The RSI indicator on the 4-hour chart indicates a loss of bullish momentum for GBP/USD. Immediate support lies at 1.3130, followed by 1.3100 and 1.3040. Resistance levels are at 1.3200, 1.3260, and 1.3300.
Nonfarm Payrolls FAQs
Nonfarm Payrolls (NFP) are a crucial component of the US labor market report, impacting Fed decisions, inflation, and interest rates. A higher NFP figure typically strengthens the USD, while a lower figure weakens it. NFPs also influence the price of Gold, with higher figures pressuring Gold prices.
Understanding the impact of Nonfarm Payrolls data on the market is essential for traders and investors to make informed decisions and navigate market fluctuations effectively.