CFD Trading Rate Great Britain Pound vs US Dollar (GBPUSD)

GBP could drift lower, possibly reaching 1.3060. The likelihood of a clear break below this level seems low for now, UOB Group FX strategists Quek Ser Leang and Alvin Liew note.

GBP may reach 1.3060 near term

24-HOUR VIEW: “GBP popped to a high of 1.3238 in NY trade last Friday before dropping sharply and swiftly to 1.3111. GBP closed at 1.3130 (-0.36%). There has been a slight increase in downward momentum, and GBP could dip below 1.3100 today. Given the mild downward pressure, any decline is not expected to reach 1.3060. Resistance is at 1.3160; a breach of 1.3190 would indicate that the current mild downward pressure has eased.”

1-3 WEEKS VIEW: “The recent price action has resulted in a modest increase in downward momentum. As long as 1.3250 is not breached, we expect GBP to drift lower, possibly reaching 1.3050. The likelihood of GBP breaking clearly below this level seems low for now.”

• GBP/USD kicks off the new week on a positive note, though the upside seems limited.
• A weaker risk tone lends support to the safe-haven USD and could act as a headwind.
• Reviving BoE rate cut bets might further contribute to capping the upside for the GBP.

The GBP/USD pair attracts some dip-buying during the Asian session on Monday and climbs back closer to mid-1.3100s in the last hour, though a combination of factors might cap any further gains. 

The closely-watched US monthly employment details released on Friday suggested that the labor market momentum is slowing more than expected and added to concerns about the health of the US economy. This, in turn, tempers investors' appetite for riskier assets, which benefits the safe-haven US Dollar (USD) and acts as a headwind for the GBP/USD pair. 

Meanwhile, a survey of recruiters showed that Britain's labour market cooled noticeably last month as job placements fell sharply and pay growth slowed. This backs the case for interest rate cuts from the Bank of England (BoE), which might further hold back bulls from placing aggressive bets around the British Pound (GBP) and keep a lid on the GBP/USD pair. 

Investors now look forward to the release of the UK monthly jobs data due on Tuesday. In the meantime, the USD price dynamics will continue to play a key role in influencing the GBP/USD pair in the absence of any relevant market-moving economic data, either from the UK or the US on Monday.

• GBP/USD remains upward biased but struggles to clear key resistance at 1.3200, with YTD high of 1.3266 looming.
• A pullback below 1.3150 could see the pair test support at 1.3087, with further downside to 1.3044 and the 50-DMA at 1.2925.
• Traders' rate cut expectations fluctuate, with a 43% chance for a 50-bps cut and 57% for a 25-bps cut.

The GBP/USD seesawed during the North American session as softer US jobs data increased. This kept investors uncertain of a 50—or 25-basis-point rate cut by the Fed at the September 17-18 meeting. The pair trades at 1.3172, virtually unchanged.

Federal Reserve interest rate expectations fluctuated after the US Nonfarm Payrolls report. Traders of fed funds futures increased their bets to a 70% chance for a 50-bps cut, yet they trimmed those odds. At the time of writing, the chances are 43%, while for a quarter of a percentage point cut, they are at 57%.

GBP/USD Price Forecast: Technical outlook

Given the backdrop, the technical view is that the GBP/USD is upward biased but failed to clear the year-to-date (YTD) peak of 1.3266, which exacerbated a dip below 1.3200 after hitting a high of 1.3239 on Friday.

With that in mind and buying momentum fading as shown by the Relative Strength Index (RSI), the GBP/USD could be headed for a pullback.

If GBP/USD retreats below 1.3150, the next support could be the September 3 low of 1.3087. On further weakness, the pair could aim toward the July 17 high at 1.3044 before moving towards the 50-day moving average (DMA) at 1.2925.

Conversely, if buyers stepped in and pushed prices above 1.3200, the next resistance would be the YTD high at 1.3266.

GBP/USD Price Action – Daily Chart

The Pound Sterling (GBP) is a minor underperformer on the day so far after drifting back from its early London peak just under 1.32, Scotiabank’s Chief FX Strategist Shaun Osborne notes.

GBP underperforms slightly in quiet trade

“There were no UK data reports and no comments from policymakers to drive movement—which seems more flow-driven ahead of the US data reports.”

“The GBP’s underperformance in European trade leaves a negative tinge to the intraday chart, with Cable forming a bearish outside range on the 6-hour chart.”

“Minor support sits at 1.3150/60 and weakness below here targets a retest of the 1.3090/00 zone. Resistance is 1.3195/00, ahead of 1.3255/65.”

• GBP/USD gains traction near 1.3180 in Friday’s Asian session. 
• US ADP private sector employment rose 99,000 in August vs. 111,000 prior. 
• Investors see a roughly one-in-four chance that the BoE will cut rates in the September meeting. 

The GBP/USD pair trades in positive territory for the third consecutive day around 1.3180 on Friday during the Asian trading hours. The persistent US Dollar (USD) weakness provides some support to the major pair. Market players will closely monitor the US August Nonfarm Payrolls (NFP) data, which is due later on Friday. 

The Automatic Data Processing (ADP) reported on Thursday that private sector payrolls grew at the weakest pace in over three and a half years in August. The US private sector added 99,000 new jobs in August, less than the downwardly revised 111,000 in July and below the forecast of 145,000.

Markets expect the Federal Reserve (Fed) to lower interest rates when it meets on September 17-18. The Bureau of Labor Statistics will release the highly-anticipated Nonfarm Payrolls later in the day, which is expected to see 160,000 job additions in the US economy in August. This report became a key event for shaping market expectations of the Fed’s policy rate. The weaker-than-expected outcome could trigger a large Fed rate cut and further undermine the USD. 

On the other hand, the modest Bank of England (BoE) interest rate cut expectations lifts the Pound Sterling (GBP). BoE Governor Andrew Bailey said last month that he thought longer-term inflation pressures were easing but additional rate cuts would not be rushed because it was still too soon to declare victory over inflation. Investors see a nearly 25% chance that the BoE will cut interest rates at its September 12 policy meeting, but the probability of a cut is fully priced for November.

• GBP/USD found a second day of gains as bidders return to Cable.
• Despite a miss in US early US jobs data, sentiment remains high on rate cut hopes.
• US NFP data on Friday to serve as a dipstick on the depth of upcoming Fed rate trim.

GBP/USD climbed for a second straight day on Thursday, setting up for a bullish recovery despite failing to recapture the 1.3200 level. Market sentiment held on the high side as a decline in new jobs growth kept hopes for an extended rate cut from the Federal Reserve (Fed) pinned to the ceiling.

UK data remains thin on the economic docket as markets wind into Friday. US Nonfarm Payrolls (NFP) jobs additions due in the last US market session of the week promise to be a big event that will draw plenty of investor eyes.

According to payroll processor ADP, the US added 99K net new jobs in August, down from July’s revised 111K and well below the expected 145K. August’s ADP additions are the lowest print since early 2021, sparking a fresh round of risk aversion and reigniting investor concerns that the US could be heading into a recession.

The ADP jobs report serves as a bellwether for what markets can expect from Friday’s upcoming US NFP report, albeit one with a wobbly track record for accuracy. August’s NFP print represents the last significant labor update before the Federal Reserve’s (Fed) upcoming rate call on September 18, when Fed policymakers are broadly expected to kick off a rate-cutting cycle.  Friday’s NFP print is slated to come in at 160K compared to the previous month’s 114K. 

According to the CME, rate markets are currently betting on 40% odds that the Fed will blow the doors open with a 50 bps cut later in the month. The remaining 60% are betting on a more demure 25 bps opening rate trim. Investors are anticipating using this Friday’s NFP print as a way to gauge the depth of the Fed’s first rate cut since the Fed slashed 100 bps in March of 2020.

GBP/USD price forecast

Despite an second intraday recovery in a row on Wednesday, Cable remains down from multi-month highs above 1.3250. The pair is sticking stubbornly to recent highs after vaulting to a peak 29-month bid in August. Price action is still tilted firmly into the bullish side above the 200-day Exponential Moving Average (EMA) at 1.2725, while the immediate downside technical target for shorts will be the 50-day EMA just above the 1.2900 handle.

GBP/USD daily chart

• GBP/USD remains above 1.3100, with RSI showing buyers in control and eyeing 1.3200 resistance.
• Clearing 1.3179 would open the door to challenge the March 2022 high of 1.3298, with further upside to 1.3437.
• A pullback below 1.3150 could lead to testing key support at 1.3100 and 1.3044, with the 50-DMA at 1.2914.

The GBP/USD aims up during the North American session, after jobs data from the United States (US) was mixed, while business activity expanded. Despite this, the pair clings to its gains and trades at 1.3166 above its opening price by 0.15% at the time of writing.

GBP/USD Price Forecast:  Technical outlook

The GBP/USD has remained above the 1.3100 figure but has been capped on the upside so far as traders await the release of August’s Nonfarm Payrolls on Friday. The Relative Strength Index (RSI) shows that buyers are in charge and could sponsor a leg-up towards 1.3200.

If GBP/USD resumes to the upside and clears 1.3179, a move to 1.3200 will be made on the cards. A breach of the latter and will expose the March 23, 2022, peak at 1.3298 before challenging the March 1, 2022, cycle high at 1.3437.

Conversely if sellers step in and push GBP/USD below 1.3150, look for a pullback to 1.3100. Despite this, bears must clear the September 3 low of 1.3087 if they remain hopeful of lower exchange rates. The next key support levels would be July 17, high at 1.3044, followed by the 1.3000 figure and the 50-day moving average (DMA) at 1.2914.

GBP/USD Price Action – Daily Chart

UK inflation expectations remain sticky, the latest BoE Decision Maker Panel survey suggests, Scotiabank’s Chief FX Strategist Shaun Osborne notes.

BoE survey data supports cautious rate view

“While the panel expects 3m output prices to moderate slightly (3.6%, down from 3.7% in the last survey), 1Y CPI expectations edged up to 2.6%, from 2.5%. The survey suggested no change in elevated wage growth trends and support the outlook for cautious reductions in UK rates in the next few months.”

“Sterling’s gains yesterday look a little more persuasive from a technical point of view. A sold gain on the day reflects signs of steady accumulation of the pound on dips over the past few sessions. Trend resistance off the late August high was broken yesterday and now serves as support (1.3095). Gains through 1.3175 target 1.3200/25 in the short run.”

• GBP/USD draws support from a combination of factors, albeit it lacks bullish conviction.
• Expectations for a slower BoE rate-cutting cycle continue to underpin the British Pound.
• Bets for a larger Fed rate cut in September weigh on the USD and further lend support.

The GBP/USD pair trades with a positive bias around mid-1.3100s during the Asian session on Thursday, albeit it lacks strong follow-through buying and remains below the weekly top touched the previous day.

The British Pound (GBP) continues to be underpinned by expectations that the Bank of England's (BoE) rate-cutting cycle is more likely to be slower than in the Eurozone or the United States. The bets were lifted by a survey from the British Retail Consortium, which showed that spending in August increased by 1.0% YoY – marking the strongest uptick since March. This, along with a softer US Dollar (USD), turns out to be a key factor acting as a tailwind for the GBP/USD pair.

The Job Openings and Labor Turnover Survey (JOLTS) published on Wednesday showed that job openings fell to 7.673 million in July, or the lowest level since January 2021. Apart from this, dovish remarks by Fed officials lifted bets for a larger interest rate cut at the upcoming FOMC policy meeting on September 17-18 and dragged the US Treasury bond yields to over a one-year low. This, in turn, keeps the USD bulls on the defensive and offers some support to the GBP/USD pair. 

That said, the cautious market mood helps limit the downside for the safe-haven Greenback. Traders also seem reluctant to place aggressive directional bets ahead of the crucial US monthly employment data – popularly known as the Nonfarm Payrolls (NPF) report on Friday. This, in turn, is seen capping the upside for the GBP/USD pair. Nevertheless, the fundamental backdrop seems tilted in favor of bulls and suggests that the path of least resistance for spot prices is to the upside. 

Heading into the key data risk, investors on Thursday will take cues from the US economic docket – featuring the ADP report on private-sector employment, the usual Weekly Initial Jobless Claims and the ISM Services PMI. This, along with the US bond yields and the broader risk sentiment, might drive the USD demand and produce short-term trading opportunities around the GBP/USD pair later during the early North American session.

• GBP/USD recovered one-quarter of one percent on Wednesday.
• Despite a bullish bounce, Cable remains hampered by familiar levels.
• US jobs data weighs on market sentiment as NFP looms ahead.

GBP/USD caught a bounce on broad-market risk flows pushing down the Greenback, keeping Cable bid on the north side of the 1.3100 handle on Wednesday. Despite a pivot in risk appetite, GBP bidders were unable to push price action into new territory, and the pair remains hobbled within recent levels.

There remains very little to say about the UK’s economic calendar for the remainder of the trading week; UK data releases are strictly low-tier through Friday, leaving Cable traders at the mercy of overall market flows into and out of the US Dollar.

US JOLTS Job Openings in July missed the mark, adding 7.673 million available jobs compared to the forecast 8.1 million, compared to the previous month’s revised 7.91 million. With the Federal Reserve (Fed) broadly expected to begin cutting interest rates on September 18, markets are tilting further into bets of a 50 bps cut to kick off the next rate cutting cycle. Rate markets are still pricing in 100 bps in total cuts by the end of 2024, but there’s still a 57% chance of the Fed’s September rate call being a slimmer 25 bps, according to CME’s FedWatch Tool.

Friday's US Nonfarm Payrolls (NFP) report looms large and represents the last round of key US labor data before the Fed’s first rate trim. Friday's NFP print is widely expected to set the tone for market expectations regarding the depth of a Fed rate cut, with investors fully priced in on the start of a new rate-cutting cycle this month.

GBP/USD price forecast

Despite an intraday recovery on Wednesday, Cable remains down from multi-month highs above 1.3250. The pair is sticking stubbornly to recent highs after vaulting to a peak 29-month bid in August. Price action is still tilted firmly into the bullish side above the 200-day Exponential Moving Average (EMA) at 1.2725, while the immediate downside technical target for shorts will be the 50-day EMA just above the 1.2900 handle.

GBP/USD daily chart

• GBP/USD breaks above 1.3140, gaining short-term momentum as RSI tilts in favor of buyers.
• Clearing 1.3200 opens the door to challenge the YTD peak of 1.3266, with further resistance at 1.3300.
• Sellers must push below 1.3140 to test key support levels at 1.3100 and 1.3043.

The Pound Sterling enjoys a good rebound off the weekly low of 1.3087 and rises in early trading on Wednesday during the North American session, climbing over 0.22% against the Greenback.  Soft US jobs data increased the odds of a 50-basis points rate cut by the Federal Reserve and underpinned the GBP/USD higher, trading at 1.3163.

GBP/USD Price Forecast: Technical outlook

The GBP/USD remains upward biased after consolidating within the 1.3080-1.3140 narrow range, with buyers clearing the latter, which would open the door for higher prices. Buyers had gained momentum short-term as seen by the Relative Strength Index (RSI).

If bulls clear 1.3200, the next resistance would be the year-to-date (YTD) peak of 1.3266. On further strength, the 1.3300 would be up for grabs before buyers challenge the March 23, 2022, high at 1.3437.

Conversely, sellers must drag prices below 1.3140 and challenge the 1.3100 figure. Once those levels are taken out, the next support would be the 1.3043, July 17 high turned support, followed by the 1.3000 figure, and the 50-day moving average (DMA) would be up next at 1.2905.

GBP/USD Price Action – Daily Chart

UK final August Services and Composite PMI data were revised modestly higher to 53.7 and 53.8 (from 53.3 and 53.4 respectively), Scotiabank’s Chief FX Strategist Shaun Osborne notes.

GBP consolidates in low 1.31 range

“Details were constructive as well. Improved sentiment is boosting spending and hiring, the surveys suggest. Somewhat stronger economic momentum will not stop BoE rate cuts but the process of easing is likely to be relatively slower than the Bank’s major central bank peers. Sterling is virtually unchanged on the session today.”

“A narrow, inside range is potentially developing on the daily chart while the intraday chart suggests the pound is trying to break above the short-term bear trend (1.3105) off of last week’s high for Cable. A break above 1.3155 would add to near-term momentum for the pound. Support is 1.3090/00.”

• GBP/USD trades steady around 1.3110 in Wednesday’s early European session.
• US ISM Manufacturing PMI was weaker-than-expected in August.
• Investors expect the BoE to leave interest rates unchanged in September.   

The GBP/USD pair flat lines near 1.3110 during the early European session on Wednesday. However, the risk-off sentiment ahead of the key US events could provide some support to the US Dollar (USD) and drag the major pair lower. The US JOLTS Job Openings and Fed Beige Book are due later on Wednesday.

Data released by the Institute for Supply Management (ISM) on Tuesday revealed that the Manufacturing PMI rose slightly to 47.2 in August from 46.8 in July. This figure came in below the market consensus of 47.5. 

According to the CME FedWatch tool, which acts as a barometer for the market's expectation of the Fed funds target rate, the chance of the Federal Reserve (Fed) cutting rates by 25 basis points (bps) at the September meeting is 61%, while the odds of the Fed cutting rates by 50 bps are 39%. 

The Fed Chair Jerome Powell said last month that the "time has come" for monetary policy to adjust, signaling that the US central bank will likely start easing monetary policy at its upcoming meeting scheduled for September 17-18. The firmer Fed rate cut bets might weigh on the USD in the near term. 

The US August employment data will be in the spotlight on Friday. Deutsche Bank economists suggested that a rise in Unemployment Rate could reinforce market expectations for a 50 bps rate cut by the Fed. 

On the other hand, the cautious mood continues to underpin the Greenback for the time being, although the Bank of England (BoE) is expected to follow a shallow interest rate cut cycle this year compared to its peer central bankers. GBP/USD will likely be influenced by USD price dynamics, given there are no top-tier economic data releases from the UK.

• GBP/USD erased further below 1.3150 on Tuesday as markets bid the Greenback.
• Market sentiment took a hit after US PMI figures failed to meet expectations.
• US NFP figures loom ahead as traders try to gauge the depth of a first Fed rate cut.

GBP/USD softened on Tuesday, briefly testing below 1.3100 as Cable struggles to hold onto a bullish stance amid a near-term bearish pullback. Greenback bidding picked up the pace after a fresh batch of US Purchasing Managers Index (PMI) figures failed to meet market expectations, reigniting investor concerns about the potential for a US recession.

Forex Today: The prospects of a US soft landing remain challenged by data

The data docket remains thin on Wednesday from the UK side, with little of note outside of low-tier final PMI figures for August. US labor figures remain a key point for market participants this week. 

ISM’s US Manufacturing PMI for August came in below expectations, printing at 47.2 and missing the median market forecast of 47.5. Despite a soft rebound from July’s multi-month low of 46.8 failed to galvanize markets, giving already flighty investors a perfect excuse to pull back from a recent lopsided tilt into bullish expectations.

Friday's US Nonfarm Payrolls (NFP) report looms large. It represents the last round of key US labor data before the Federal Reserve (Fed) delivers its latest rate call on September 18. Friday's NFP print is widely expected to set the tone for market expectations regarding the depth of a Fed rate cut, with investors fully priced in on the start of a new rate-cutting cycle this month.

GBP/USD price forecast

Cable has backslid from multi-month highs above 1.3250 back below the 1.3150 level as Greenback selling pressure cools, but the pair is stubbornly sticking to recent highs after vaulting to a peak 29-month bid in August. Price action is still tilted firmly into the bullish side above the 200-day Exponential Moving Average (EMA) at 1.2725, while the immediate downside technical target for shorts will be the 50-day EMA just above the 1.2900 handle.

GBP/USD daily chart

The UK S&P Global Manufacturing PMI for August was confirmed at 52.5 yesterday, the strongest result for the index in a little over two years, Scotiabank’s Chief FX Strategist Shaun Osborne notes.

GBP gains above 1.3160 may drive some short-term gains

“Growth momentum, still elevated wages and inflation hotspots will keep the BoE sidelined in September (just 5-6bps of cuts are priced in for the policy meeting on the 19th) as many other core central banks ease policy. Slower rate cuts in the UK relative to other top central banks should limit scope for GBP losses in the near term.”

“GBP/USD has corrected a bit less than a quarter of the August rally and looks to be finding support around 1.3120 Fibonacci retracement (23.6% of the 1.2660/1.3266 rally). A low close on the week through Friday suggests consolidation rather than outright bearishness for the pound.”

“GBP gains above 1.3160 may drive some short-term gains while a push under 1.3120 will likely drive a little more weakness towards the 1.2950/1.3050 range.”

• GBP/USD slips below 1.3100 despite RSI giving mixed signals.
• RSI trends bullish but momentum shifts to sellers, descending towards neutral.
• A drop below 1.3100, GBP/USD could test July 17 high at 1.3043; further drops may reach psychological 1.3000, then 50-DMA at 1.2894.
• Bullish trend resumes if GBP/USD sustains above 1.3100, surpassing September 2 peak at 1.3155, aiming for channel top at 1.3200.

The GBP/USD makes a U-turn, dives in early trading on Tuesday during the North American session, losing around 0.20%, and trades at 1.3099, below the 1.3100 figure.

The US ISM Manufacturing PMI for August missed estimates, suggesting the economy is cooling due to the Fed's restrictive policy. However, an employment sub-component inside the report showed a slight improvement, which could be a prelude to Friday’s Nonfarm Payrolls report.

GBP/USD Price Forecast: Technical outlook

The GBP/USD slid sharply on the data release, about to crack the 1.3100 figure. The Relative Strength Index (RSI) remains bullish, but momentum has swung in the sellers' favor as the RSI aims lower, approaching its neutral level.

If GBP/USD tumbles below 1.3100, this could clear the path to test the 1.3043, July 17 high turned support. A drop below could cause the pair to test 1.3000, and if surpassed, the 50-day moving average (DMA) would be up next at 1.2894.

If bulls want to remain in charge, they must hold GBP/USD above 1.3100. For an uptrend resumption, clear the September 2 peak at 1.3155 before challenging the ascending channel top-trendline at 1.3200.

GBP/USD Price Action – Daily Chart

• GBP/USD weakens around 1.3125 in Tuesday’s early European session. 
• Traders prefer to wait on the sidelines ahead of US ISM PMI data. 
• Investors expect no rate cut by the BoE in the September meeting but see another 25 bps rate cut in November. 

The GBP/USD pair trades on a weaker note near 1.3125 during the early European session on Tuesday. The sell-off of the major pair is dragged lower by the firmer US Dollar (USD) ahead of the key US economic data. The Bank of England (BoE) Deputy Governor Sarah Breeden is set to speak later on Tuesday, followed by the release of the US ISM Manufacturing Purchasing Managers Index (PMI). 

Investors gain more confidence that the US Federal Reserve (Fed) will start easing the monetary policy at its upcoming meeting in September, pricing in the odds of nearly 69% of the 25 basis points (bps) rate cut, according to the CME FedWatch tool. Fed Chair Jerome Powell not only said at the annual Jackson Hole symposium last month that “time has come for policy to adjust.”

The firmer Fed rate cut might weigh on the Greenback in the near term. Rabobank analysts currently expect four Fed rate cuts between September and January and then hold for the rest of 2025. Friday's US Nonfarm Payrolls (NFP) report will be more significant than usual and might offer some hints about the size and pace of the Fed rate cut. The US economy is expected to see 163K job additions in August, while the Unemployment Rate is expected to tick lower to 4.2%.

On the other hand, the markets anticipate no rate cut by the BoE in the September meeting, while the possibility of a 25 bps rate cut in the November meeting stands at 87.2%. In the absence of top-tier economic data releases from the UK this week, the USD price dynamic will be the main driver for the GBP/USD. 

• GBP/USD remains buoyed above 1.3100 on holiday market start to the trading week.
• UK data remains thin this week, Pound Sterling to rise and fall at the mercy of market flows.
• One last key US NFP print looms on Friday before upcoming Fed rate call.

GBP/USD turned into the midrange on Monday, plagued by a thin economic calendar on the UK side and shuttered US markets for the Labor day holiday. Despite a middling open to the trading week, Cable looks poised to continue a near-term pullback, assuming markets aren’t thrown into a tailspin by US jobs figures due later in the week.

The UK is poorly represented on the economic calendar throughout the week, with only low-tier prints on the offer for GBP traders. US Purchasing Managers Index (PMI) figures are dotted throughout the week, but US labor figures will be the key prints on both Thursday and Friday. US ADP Employment Change slated for Thursday represents the first hurdle on the road to Friday’s US NFP jobs data dump. This week represents the last major labor update for the US economy before the Fed delivers its hotly-anticipated rate call on September 18. 

Before both of those, however, US JOLTS job openings due on Wednesday are expected to hold steady near 8.1M in July, in-line with the previous month’s 8.184M.

GBP/USD price forecast

Cable has backslid from multi-month highs above 1.3250 back below the 1.3150 level as Greenback selling pressure cools, but the pair is stubbornly sticking to recent highs after vaulting to a peak 29-month bid in August. Price action is still tilted firmly into the bullish side above the 200-day Exponential Moving Average (EMA) at 1.2725, while the immediate downside technical target for shorts will be the 50-day EMA just above the 1.2900 handle.

GBP/USD daily chart

• GBP/USD fails to hold above July high of 1.3142, closing August at 1.3122, hinting at possible consolidation.
• Daily chart reveals a ‘bullish-harami’ pattern; clearing 1.3199 could aim for YTD high of 1.3266.
• Downside break below 1.3109 risks fall to 1.3044 and further to the 50-DMA at 1.2894.
• Momentum leans neutral to bullish, with RSI positive but stabilizing.

The GBP/USD begins September on a slight positive tone and trades at 1.3152, up by over 0.20% during the North American session. The session is expected to be light as US financial markets remain closed in observance of Labor Day.

GBP/USD Price Forecast: Technical outlook

The GBP/USD monthly chart witnessed a breakout failure of the July 2023 monthly high of 1.3142. Traders failed to achieve a daily close above the latter, ending August at 1.3122.

From a weekly chart standpoint, the GBP/USD is set for consolidation at around the 1.3140-1.3270 range before the release of US Nonfarm Payrolls data, which would be crucial for the US Federal Reserve to determine the size of the first-rate cut at the September 18 meeting.

Meanwhile, from a daily chart point of view, the GBP/USD is forming a ‘bullish-harami’ candle chart pattern, though traders must clear last Friday’s peak at 1.3199 before the pair can aim toward the year-to-date (YTD) highs of 1.3266.

Conversely, if GBP/USD consolidates and breaks below the August 29 swing low of 1.3109, this could exacerbate a drop toward the latest support level seen at the July 17 swing high of 1.3044 before slumping to the 50-day moving average (DMA) at 1.2894.

Momentum is neutral to bullish biased, as the Relative Strength Index (RSI) is in bullish territory but has turned flat.

GBP/USD Price Action – Daily Chart