It is holding steady as US data leaves uncertainty over the Fed’s interest rate cut

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

GBP/USD wobbled during the North American session as weaker US jobs data picked up. That kept investors uncertain about a rate cut of 50 or 25 basis points by the Fed at its September 17-18 meeting. The pair is trading at 1.3172, basically unchanged.

Federal Reserve interest rate expectations fluctuated after the US Non-Farm Payrolls report. Traders in fed funds futures increased their bets to a 70% chance of a 50 basis point discount, but reduced those odds. At the time of writing, the odds are 43%, while for a quarter-percentage point reduction, they are 57%.

GBP/USD Price: Technical Insights

Given the context, the technical view is that GBP/USD is trending higher but has failed to break the year-to-date (YTD) peak of 1.3266, which exacerbated a dip below 1.3200 after it hit a high of 1.3239 on Friday.

Given this and the decline in buying momentum as shown by the Relative Strength Index (RSI), GBP/USD could be headed for a pullback.

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

Conversely, if buyers were to step in and push prices above 1.3200, the next resistance would be the YTD high at 1.3266.

GBP/USD Price Action – Daily Chart