- The GBP/USD forecast edges higher as UK employment data relieves pressure.
- The BoE’s potential rate cut expectations limit the upside pressure.
- UK PMI and US NFP data are key to watch for fresh impetus.
GBP/USD traded modestly up as fresh UK labor data showed easing strain in the jobs market. The ILO unemployment rate rose to 5.1% in the three months to October, up from 5.0% previously. The reading met expectations but confirmed a gradual loss of momentum in employment conditions.
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Meanwhile, claimant counts increased by 20,100 in November, reversing October’s revised decline. Employment change remained negative, with payrolls down by 17,000 in October. While the pace of job losses slowed, the trend still points to weaker labor demand.
Wage growth stayed elevated but showed early signs of cooling. Average earnings excluding bonuses rose 4.6% YoY, slightly below the prior reading. Earnings including bonuses increased 4.7%, beating forecasts but still lower than earlier levels. Pay growth remains well above inflation, yet the direction no longer supports further policy tightening.
Hence, these figures reinforce expectations that the Bank of England will cut rates at its upcoming meeting. Markets now view a policy move as likely, limiting upside pressure on sterling. Traders remain cautious ahead of the decision, especially with recent data failing to justify a hawkish stance.
Attention is now shifting to incoming UK PMI data, which may offer clues on business activity and hiring trends. Still, central bank guidance remains the dominant driver for the pound in the near term.
On the US side, the dollar continues to trade under pressure due to uncertainty around Fed policy. Markets expect deeper rate cuts in 2026 than the Fed has signaled. This gap leaves the dollar vulnerable to sudden repricing.
The upcoming US Non-Farm Payrolls report will play a key role. It will include two months of data and comes after disruptions from a government shutdown. Forecasts point to modest job growth in November, though risks lean to the downside following weak private payroll figures.
Investors will focus less on the unemployment rate and more on payroll gains and wage growth. Average hourly earnings remain the clearest signal for inflation risk and future Fed decisions.
GBP/USD Technical Forecast: Buyers Eying 1.3440
The GBP/USD chart shows a modest rebound from the 1.3350 demand zone, coinciding with the 50-period MA, surging above the 20-period MA near 1.3380. Now the pair is eying the resistance at recent swing high near 1.3440 as the RSI climbs well above the 50.0 level.
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On the flip side, any dip below the 1.3350 confluence could alter the pound’s bullish outlook. The pair could dip further down to 1.3300 round number ahead of 100-period MA support at 1.3280.
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