- GBP/USD trades in a narrow band above 1.3250 on Monday.
- GBP/USD snapped a six-day losing streak after weak US jobs data on Friday.
- The technical outlook doesn’t yet hint at a bullish reversal.
GBP/USD finds it difficult to attract bulls in the European session on Monday and fluctuates below 1.3300. The pair’s near-term technical outlook doesn’t yet offer any convincing signs of a bullish reversal.
The broad-based selling pressure surrounding the US Dollar (USD) helped GBP/USD gain traction and allowed the pair to snap a six-day losing streak.
The monthly data published by the US Bureau of Labor Statistics (BLS) showed that Nonfarm Payrolls (NFP) rose by 73,000 in July, missing analysts’ estimate of 110,000, while the Unemployment Rate edged higher to 4.2% from 4.1%, as expected. More importantly, the BLS announced that it revised down May and June NFP increases, noting that NFP growth in this two-month period combined was 258,000 lower than previously reported.
The probability of a 25 basis points Federal Reserve (Fed) rate cut in September jumped above 70% from about 30% before the data, as per CME FedWatch Tool. In turn, the USD weakened sharply against its peers.
The economic calendar will not feature any high-tier macroeconomic data releases on Monday. Later in the week, the Bank of England (BoE) will announce monetary policy decisions.
In the meantime, market participants will keep a close eye on US politics. Following the dismal employment report, US President Donald Trump fired BLS Chief Erika McEntarfer, accusing her of manipulating the numbers for political purposes. Additionally, Fed Governor Adriana Kugler, whose term was scheduled to end on January 31, 2026, announced her resignation.
Investors could opt to stay away from the USD in case political developments feed into concerns over the Fed or the BLS losing independence.
GBP/USD Technical Analysis
The Relative Strength Index (RSI) indicator on the 4-hour chart stays below 50 and GBP/USD remains within the one-month-old descending regression channel, suggesting that the bearish bias remains intact following Friday’s rebound.
On the downside, the 20-period Simple Moving Average (SMA) aligns as interim support at 1.3250 ahead of 1.3200 (static level, round level) and 1.3140 (lower limit of the descending channel).
Looking north, resistance levels could be spotted at 1.3300 (static level, round level), 1.3330 (former support level) and 1.3370 (50-period SMA).
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