GBP/USD surges against US Dollar on soft US jobs data, eyes on Powell

• Sterling climbs, benefiting from a weaker dollar after disappointing US employment figures.
• Initial Jobless Claims rise to 217K, underscoring cooling US labor market despite Powell's openness to future policy easing.
• UK's economic growth forecasts bolster GBP, with Chancellor Hunt presenting optimistic projections for 2024 and 2025.

The Pound Sterling moderately advanced in the North American session on Thursday, as the Greenback remains on the defensive after a soft jobs report from the United States (US). Therefore, the GBP/USD trades at 1.2756, up 0.19%.

GBP/USD edges up on weak US economic data

US economic data is not helping the US Dollar, which is failing to gain traction following Federal Reserve Chair Jerome Powell's speech on Wednesday. Powell didn’t say anything dovish other than acknowledging that the Federal Reserve would ease policy “at some point this year,” though he emphasized that it would depend on data. He would speak again on Thursday at around 15:00 GMT.

In the meantime, the labor market is cooling. The Initial Jobless Claims for the week ending March 2 came at 217K, surpassing estimates and the previous reading of 215 K. Today’s data confirms Wednesday’s US Job Openings and Labor Turnover Survey (JOLTS), which revealed that there were 8.863 M job openings, which fell short of estimates and was lower than December’s 8.889M.

Other data showed that private hiring improved by 140K, less than forecasts of 150K. On Friday, the US Department of Labor will release the Nonfarm Payrolls for February, which are expected to rise by 200K, less than January’s 353K.

Across the pond, the UK’s Chancellor of the Exchequer, Jeremy Hunt, presented the spring budget to the House of Commons. Hunt stated the UK economy is estimated to grow by 0.8% in 2024 and 1.9% in 2025, stronger than the 0.7% and 1.4% growth rates forecast by the Office for Budget Responsibility (OBR) in November.

GBP/USD Price Analysis: Technical outlook

The GBP/USD resumed its uptrend following Powell’s speech and US economic data, with buyers targeting the 1.2800 figure. It should be said that Relative Strength Index (RSI) studies are bullish and not in overbought territory, an indication that the rally has legs. Above 1.2800, the next resistance would be the psychological 1.2850, followed by the 1.2900 mark. On the other hand, if sellers drag the exchange rate below the March 6 high of 1.2761, that could open the door for a correction. The next support would be today’s low at 1.2722, followed by the 1.2700 figure.