GBP/USD Price Forecast: Holds steady as US data leaves Fed rate cut uncertainty

• 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