British Pound rallies as weak NFP smashes Fed hike bets

• NFP misses forecasts, with prior months revised sharply lower.
• Fed tightening bets ease as yields pressure the Dollar.
• Burnham uncertainty and intervention rumors keep Cable volatility elevated.

The Pound Sterling registers solid gains versus the US Dollar on Thursday after the latest US employment report missed estimates, reducing the chances of a Federal Reserve rate hike. The GBP/USD trades at 1.3359, down 0.64%.

GBP/USD gains as soft payrolls drag Dollar and yields lower

The US jobs market weakened slightly in June, with Nonfarm Payrolls coming at 57K below estimates of 110K. May numbers were downwardly revised from 172K to 129K, and April’s data were revised from 179 K to 148 K. The Unemployment Rate ticked lower from 4.3% to 4.2%, but analysts blame it on a decline in labour force participation, which reached 61.5%, the lowest since March 2021.

Money markets adjusted their Fed hawkish bets, with investors expecting just 23 basis points of tightening towards the end of the year, according to Prime Terminal data.

US Treasury yields are aiming lower, as the 10-year T-note yields 4.461%, down 2 basis points, a headwind for the Greenback. The US Dollar Index (DXY), which tracks the buck’s performance against a basket of six currencies, is down 0.65% at 100.75.

US Factory Orders contracted in May, due to a decline in commercial aircraft orders, with the numbers dropping to -1.3%, below estimates of -1.8% but down from April’s stellar 5.3% print.

The San Francisco Fed's Mary Daly commented that she sees positive signs about the US economy and recognised that higher prices were caused by tariffs and the Oil price shock. She added that the policy is “slightly restrictive,” yet noted that there are scenarios in which the Fed must fight inflation.

In the UK, the economic schedule was absent, but focus is on Andy Burhnamw, the favourite to succeed the current Prime Minister Keir Starmer.

Traders remain cautious about Cable amid uncertainty over Burnham’s policies. Meanwhile, the GBP remains boosted by the fall in Oil prices and by rumors of Japanese authorities intervening in the foreign exchange markets, as the USD/JPY pair fell from around 162.50 to 160.95 at the time of writing.

GBP/USD Price Forecast: Technical outlook

In the daily chart, GBP/USD trades at 1.3362, holding a bearish near-term bias as spot remains capped beneath the cluster of simple moving averages (50, 100 and 200) around 1.3413 and below the descending resistance trend line projected from 1.3522. The pair has slipped away from prior highs while the Relative Strength Index (14) at 54 stays just above its neutral line, hinting at modest, rather than aggressive, upside momentum that so far fails to overcome the overhead structure.

On the topside, initial resistance is located at the triple simple moving average area near 1.3413, with the next barrier coming at the descending trend resistance around 1.3522. On the downside, the key technical floor is the rising support trend line originating near 1.3159, where a decisive break would reinforce the broader bearish tone and expose lower levels, while holding above it would keep the pair bounded in a corrective consolidation under the moving averages.

(The technical analysis of this story was written with the help of an AI tool.)