Pound Faces Fifth Weekly Loss as Dollar Strength Persists

Traders' Opinions

Summary:

GBP/USD remains near four-week lows around 1.3200 as strong Dollar demand and rising bond yields pressure Sterling. US payrolls are the next major catalyst.

SELL GBPUSD

EXP

TRADING

1.32080

Entry Price

1.29000

1.33000

1.32326 +0.00387 +0.29%

0.0

Pips

Flat

1.29000

Exit Price

1.32080

Entry Price

1.33000

The British Pound is struggling to generate meaningful upside against the US Dollar on Friday, leaving GBP/USD hovering just above 1.3200 and within touching distance of Thursday’s four-week low near 1.3180. Sterling is now heading toward a fifth consecutive weekly decline, reflecting persistent demand for the Greenback and fading confidence in the Pound.

Attention is firmly fixed on the upcoming US Nonfarm Payrolls report, which could determine whether the Dollar extends its recent advance. Markets expect the US economy to have added 90,000 jobs in September, while the unemployment rate is forecast to remain unchanged at 4.1%. Expectations for a resilient report were strengthened after Wednesday’s ADP employment figures exceeded forecasts.

The Federal Reserve outlook remains an important driver. Recent inflation figures have reduced expectations for another rate increase in October, but policymakers continue to signal that the tightening cycle may not be finished. Dallas Fed President Lorie Logan said rates may need to rise by at least another 50 basis points to bring inflation under control, while Minneapolis Fed President Neel Kashkari continues to anticipate another increase before year-end.

The Dollar is also benefiting from the sharp selloff across global bond markets. Rising longer-term yields have weakened risk appetite and increased demand for the US currency. Brown Brothers Harriman attributed the move in yields to expectations for tighter monetary policy and higher real term premiums, while noting that longer-term inflation expectations remain anchored.

Sterling, meanwhile, has received little help from the domestic backdrop. The UK's final S&P Global Manufacturing PMI was revised lower on Thursday, with output expanding at its weakest pace in six months. That has diluted some of the support generated by recent hawkish signals from Bank of England officials, including Governor Andrew Bailey.

The combination leaves GBP/USD vulnerable heading into the US employment release. A stronger-than-anticipated payrolls figure could reinforce expectations for additional Fed tightening and place renewed pressure on the 1.3180–1.3200 region. Conversely, a substantial downside surprise could provide Sterling with some breathing room and trigger a corrective recovery.

The broader bias remains bearish while GBP/USD struggles beneath recently broken support levels. Sterling's inability to generate a convincing recovery despite reduced expectations for an October Fed hike suggests sellers remain firmly in control. Unless the US jobs report materially weakens the Dollar, rallies in GBP/USD are likely to remain vulnerable to renewed selling.

Technical Analysis

GBP/USD remains under firm bearish pressure on the 4-hour chart, with the broader structure continuing to produce lower highs and lower lows following the rejection from the 1.3640 region. The latest recovery attempts have been shallow, suggesting buyers are struggling to regain control as selling pressure remains dominant.

The pair is currently trading around 1.3208, sitting near an important short-term support area. Price recently attempted to rebound toward the 1.3290–1.3310 resistance zone, but sellers quickly returned, reinforcing that former support has now become a significant barrier to recovery.

A decisive break beneath 1.3190–1.3200 would strengthen the bearish continuation signal and expose the next major demand zone around 1.3100–1.3130. This area could generate a temporary rebound, but unless buyers can reclaim the broken resistance above, such a recovery would likely remain corrective. A clean breakdown below 1.3100 would open the door toward 1.3000, followed by the chart's broader downside objective around 1.2890–1.2900.

On the upside, the first meaningful obstacle remains around 1.3290–1.3310. A sustained move above this region would weaken the immediate bearish setup and could trigger a deeper recovery. Beyond there, resistance is visible around 1.3470–1.3500, although the pair would need a substantial reversal in structure before that area becomes a realistic bullish target.

For now, the technical picture continues to favour sellers. Repeated failures to sustain rebounds, the loss of previous support zones and the established sequence of lower highs suggest that selling rallies remains the stronger strategy while GBP/USD stays below 1.3300.

TRADE RECOMMENDATION

SELL GBP/USD

ENTRY PRICE: 1.3208

STOP LOSS: 1.3300

TAKE PROFIT: 1.2900

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Pound Faces Fifth Weekly Loss as Dollar Strength Persists

Technical Analysis

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