- GBP/USD maintains an upward bias but faces difficulty breaking through key resistance at 1.3200, with the year-to-date high of 1.3266 on the horizon.
- A dip below 1.3150 could lead the pair to test support at 1.3087, with additional downside potential towards 1.3044 and the 50-day Moving Average (DMA) at 1.2925.
- Rate cut expectations remain volatile, with a 43% probability for a 50-bps cut and 57% for a 25-bps cut.
During the North American session, GBP/USD experienced volatility as softer US jobs data fueled uncertainty about whether the Fed would implement a 50 or 25-basis-point rate cut at the September 17-18 meeting. The pair currently trades at 1.3172, remaining virtually unchanged.
Federal Reserve rate expectations fluctuated following the US Nonfarm Payrolls report. Traders initially increased their bets to a 70% chance for a 50-bps cut but later reduced those odds. As of now, there is a 43% probability for a 50-bps cut, while the likelihood of a 25-bps cut stands at 57%.
GBP/USD Price Forecast: Technical Outlook
Technically, GBP/USD remains upwardly biased but struggled to clear the year-to-date (YTD) peak of 1.3266, leading to a dip below 1.3200 after reaching a high of 1.3239 on Friday.
With buying momentum fading, as indicated by the Relative Strength Index (RSI), GBP/USD could be poised for a pullback.
If the pair retreats below 1.3150, the next support level could be the September 3 low of 1.3087. Should the weakness continue, the pair might target the July 17 high at 1.3044, followed by the 50-day moving average (DMA) at 1.2925.
Conversely, if buyers regain control and push prices above 1.3200, the next resistance level would be the YTD high at 1.3266.
GBP/USD Price Action – Daily Chart
