GBP/USD Struggles for Direction Ahead of Crucial US Jobs Report

Traders' Opinions

Summary:

GBP/USD remains confined between 1.3400 and 1.3500 as traders avoid large positions ahead of the US Nonfarm Payrolls report. Sterling retains a modest bid, but renewed speculation over a possible September Fed rate hike is limiting upside momentum.

SELL GBPUSD

EXP

TRADING

1.34380

Entry Price

1.31700

1.36000

1.34955 +0.00428 +0.32%

0.0

Pips

Flat

1.31700

Exit Price

1.34380

Entry Price

1.36000

The British Pound is struggling to generate meaningful momentum against the US Dollar on Friday, with GBP/USD hovering just below 1.3450 as traders await the latest US employment figures. Sterling is attempting to extend its recovery for a second consecutive session, but the broader picture remains one of consolidation, with the pair trapped inside the 1.3400–1.3500 range that has dominated trading since the beginning of August.

The US Dollar found some support on Thursday following a Financial Times report suggesting Federal Reserve Chair Kevin Warsh could consider raising interest rates as early as September if incoming inflation figures show that price pressures remain persistently elevated.

The report has introduced another layer of uncertainty into the Fed outlook. Expectations that US monetary policy could remain restrictive—or potentially become even tighter—provide underlying support for the Dollar and make it more difficult for GBP/USD bulls to generate a sustained breakout.

However, investors appear reluctant to aggressively chase the Dollar higher before Friday's US Nonfarm Payrolls report.

Markets expect the US economy to have added around 80,000 jobs in July, improving from June's 57,000 increase. The unemployment rate is forecast to remain unchanged at 4.2%, while average hourly earnings are expected to rise 0.3% month-on-month and 3.5% annually.

In my view, the employment report could provide the catalyst needed to finally push GBP/USD outside its increasingly narrow range. A stronger-than-expected payrolls figure, particularly if accompanied by firmer wage growth, would reinforce speculation that the Fed has room to maintain a hawkish stance and could push GBP/USD back toward the 1.3400 area.

Conversely, disappointing employment figures would challenge the recent improvement in Dollar sentiment and could give Sterling another opportunity to attack 1.3500.

From a broader perspective, however, the Pound's latest recovery appears to be losing conviction. Buyers have repeatedly struggled to transform short-term rebounds into a convincing breakout, leaving significant resistance overhead.

Technical Analysis

GBP/USD remains trapped within a broad daily range, but the latest price action is beginning to favor the downside. The pair is trading around 1.3435 after once again failing to establish a sustained foothold above the 1.3470–1.3490 resistance zone. Repeated rejection from this area suggests that sellers continue to defend the upper boundary aggressively, increasing the risk of another rotation lower.

The immediate focus is now on the 1.3300–1.3320 support region. This zone has repeatedly attracted buyers and remains the first major downside barrier. A decisive daily break below 1.3300 would strengthen the bearish structure and expose 1.3250 before opening the door toward the much stronger 1.3150–1.3170 demand zone, which has marked several significant bottoms since March.

On the upside, bulls would need to reclaim 1.3490 to invalidate the immediate bearish setup. A sustained breakout above this resistance would shift attention toward 1.3550, while the broader ceiling around 1.3640–1.3660 remains the major upside barrier.

Overall, GBP/USD appears vulnerable while trading beneath 1.3470–1.3490. Repeated failures around resistance, combined with the inability to maintain recent rebounds, suggest that upside momentum is weakening. In my view, a break beneath 1.3300 would provide stronger confirmation that sellers have regained control, potentially setting up a deeper decline toward 1.3160.

TRADE RECOMMENDATION

SELL GBP/USD

ENTRY PRICE: 1.3438

TAKE PROFIT: 1.3170

STOP LOSS: 1.3600

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GBP/USD Struggles for Direction Ahead of Crucial US Jobs Report

Technical Analysis

Risk Disclosure