GBP/USD held near two-week highs around 1.3340 as traders reassessed the dollar after a weak US jobs report. Softer payrolls have tempered bets on further Federal Reserve rate hikes, yet high US yields keep the dollar supported.
The Pound to Dollar exchange rate held close to two-week highs around 1.3340 as investors kept reassessing the US dollar after last week’s disappointing labour market report. Sterling had hit 2-week highs around 1.3380 last week before settling lower on Monday.
Weak payrolls shift the dollar view
The soft jobs data has tempered expectations of further Federal Reserve rate hikes, though the dollar stays supported by relatively high US yields and firm investor demand. The increase in non-farm payrolls was held to 57,000, against expectations of around 115,000, alongside a big drop in the workforce.
Analysts read the shift differently. According to CurrencyNews, City Index strategist David Scutt said the risk-reward had changed: “The risk-reward is no longer as one-sided as it was only a week ago.” SocGen, by contrast, stays positive on the dollar, expecting its strength to persist through the second half of the year. Pound influences stayed limited, with the 10-year bond yield edging down to 4.77% from 4.80% the week before.
Technical levels frame the range
On the charts, GBP/USD’s rally resumed after a brief retreat, with intraday bias back on the upside toward 1.3459 resistance. A firm break there would argue that the whole correction from 1.3867 has completed and target 1.3657 resistance for confirmation. On the downside, a move below 1.3327 minor support would turn the bias neutral again.
Continuum Economics flagged a similar picture, noting a sharp bounce to congestion resistance at 1.3400, where overbought daily stochastics are prompting consolidation near that resistance level. A break above 1.3400 could extend late-June gains toward congestion around 1.3450, with support down to 1.3300.
For the pound itself, forecasts stay contained: UoB sees a firm underlying tone, while CIBC expects GBP/USD held at 1.33 by the end of this year.
Sources: CurrencyNews.co.uk, Action Forex, Continuum Economics (snippet-based)
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