GBP/USD Forecast: Pound Sterling could test 1.2820 if NFP fails to support USD
Premium|Take advantage of 60% OFF on your first month.
Grab this special offer, it's 7 months for FREE deal! And access ALL our articles and analysis.
You have reached your limit of 5 free articles for this month.
BLACK FRIDAY SALE! 60% OFF!
Grab this special offer, it's 7 months for FREE deal! And access ALL our articles and analysis.
CLAIM OFFER- GBP/USD clings to modest daily gains above 1.2750 on Friday.
- BoE left the bank rate unchanged at 5.25% as expected.
- US Bureau of Labor Statistics will release January jobs report.
GBP/USD gathered bullish momentum and closed in positive territory on Thursday after dipping below 1.2650 with the immediate reaction to the Bank of England's (BoE) policy announcements. The pair holds its ground in the European session on Friday and trades modestly higher on the day above 1.2750.
The BoE maintained the bank rate at 5.25%, as expected, following the first policy meeting of the year. The BoE dropped the statement that read "further tightening in monetary policy would be required if there were evidence of more persistent inflationary pressures" but said that they need more evidence that inflation will fall to the 2% target and stay there before cutting rates.
In the post-meeting press conference, Governor Andrew Bailey didn't offer any hints on the possible timing of a policy pivot. Pound Sterling came under modest selling pressure but the broad-based US Dollar (USD) weakness helped GBP/USD reverse its direction in the American session.
Pound Sterling price this week
The table below shows the percentage change of Pound Sterling (GBP) against listed major currencies this week. Pound Sterling was the strongest against the US Dollar.
| USD | EUR | GBP | CAD | AUD | JPY | NZD | CHF | |
| USD | -0.41% | -0.46% | -0.58% | -0.28% | -0.93% | -0.91% | -0.92% | |
| EUR | 0.43% | -0.02% | -0.15% | 0.16% | -0.47% | -0.47% | -0.49% | |
| GBP | 0.46% | 0.03% | -0.11% | 0.19% | -0.43% | -0.45% | -0.46% | |
| CAD | 0.58% | 0.16% | 0.12% | 0.31% | -0.32% | -0.31% | -0.33% | |
| AUD | 0.27% | -0.15% | -0.19% | -0.31% | -0.64% | -0.63% | -0.65% | |
| JPY | 0.91% | 0.45% | 0.58% | 0.32% | 0.62% | -0.01% | -0.02% | |
| NZD | 0.90% | 0.50% | 0.46% | 0.33% | 0.63% | -0.01% | -0.01% | |
| CHF | 0.91% | 0.49% | 0.46% | 0.34% | 0.64% | 0.01% | 0.02% |
The heat map shows percentage changes of major currencies against each other. The base currency is picked from the left column, while the quote currency is picked from the top row. For example, if you pick the Euro from the left column and move along the horizontal line to the Japanese Yen, the percentage change displayed in the box will represent EUR (base)/JPY (quote).
On Friday, the US Bureau of Labor Statistics will publish January jobs report. Nonfarm Payrolls (NFP) are forecast to rise by 180,000 in January following December's better-than-expected 216,000 growth. Earlier in the week, Federal Reserve Chairman Jerome Powell explained that they could consider lowering the policy rate sooner if they saw an unexpected weakening in the labor market.
A disappointing NFP print, between 100K and 150K, could force the USD to continue to weaken ahead of the weekend and fuel another leg higher in GBP/USD. On the other hand, markets could continue to lean toward a Fed rate cut in May and help USD find a foothold. According to CME FedWatch Tool, markets are still pricing in a 35% probability of a Fed rate reduction in March.
GBP/USD Technical Analysis
GBP/USD pierced through 1.2700, where the 50-, 100- and 200-period Simple Moving Averages (SMA) on the 4-hour chart are located, and closed the last 4 4-hour candles above that level. Meanwhile, the Relative Strength Index (RSI) indicator rose to 60, confirming the bullish tilt in the short-term outlook.
On the upside, 1.2780 (static level) aligns as interim resistance before 1.2820 (end-point of the latest uptrend) and 1.2860 (static level from July). Strong support is located at 1.2700 before 1.2650 (Fibonacci 23.6% retracement).
- GBP/USD clings to modest daily gains above 1.2750 on Friday.
- BoE left the bank rate unchanged at 5.25% as expected.
- US Bureau of Labor Statistics will release January jobs report.
GBP/USD gathered bullish momentum and closed in positive territory on Thursday after dipping below 1.2650 with the immediate reaction to the Bank of England's (BoE) policy announcements. The pair holds its ground in the European session on Friday and trades modestly higher on the day above 1.2750.
The BoE maintained the bank rate at 5.25%, as expected, following the first policy meeting of the year. The BoE dropped the statement that read "further tightening in monetary policy would be required if there were evidence of more persistent inflationary pressures" but said that they need more evidence that inflation will fall to the 2% target and stay there before cutting rates.
In the post-meeting press conference, Governor Andrew Bailey didn't offer any hints on the possible timing of a policy pivot. Pound Sterling came under modest selling pressure but the broad-based US Dollar (USD) weakness helped GBP/USD reverse its direction in the American session.
Pound Sterling price this week
The table below shows the percentage change of Pound Sterling (GBP) against listed major currencies this week. Pound Sterling was the strongest against the US Dollar.
| USD | EUR | GBP | CAD | AUD | JPY | NZD | CHF | |
| USD | -0.41% | -0.46% | -0.58% | -0.28% | -0.93% | -0.91% | -0.92% | |
| EUR | 0.43% | -0.02% | -0.15% | 0.16% | -0.47% | -0.47% | -0.49% | |
| GBP | 0.46% | 0.03% | -0.11% | 0.19% | -0.43% | -0.45% | -0.46% | |
| CAD | 0.58% | 0.16% | 0.12% | 0.31% | -0.32% | -0.31% | -0.33% | |
| AUD | 0.27% | -0.15% | -0.19% | -0.31% | -0.64% | -0.63% | -0.65% | |
| JPY | 0.91% | 0.45% | 0.58% | 0.32% | 0.62% | -0.01% | -0.02% | |
| NZD | 0.90% | 0.50% | 0.46% | 0.33% | 0.63% | -0.01% | -0.01% | |
| CHF | 0.91% | 0.49% | 0.46% | 0.34% | 0.64% | 0.01% | 0.02% |
The heat map shows percentage changes of major currencies against each other. The base currency is picked from the left column, while the quote currency is picked from the top row. For example, if you pick the Euro from the left column and move along the horizontal line to the Japanese Yen, the percentage change displayed in the box will represent EUR (base)/JPY (quote).
On Friday, the US Bureau of Labor Statistics will publish January jobs report. Nonfarm Payrolls (NFP) are forecast to rise by 180,000 in January following December's better-than-expected 216,000 growth. Earlier in the week, Federal Reserve Chairman Jerome Powell explained that they could consider lowering the policy rate sooner if they saw an unexpected weakening in the labor market.
A disappointing NFP print, between 100K and 150K, could force the USD to continue to weaken ahead of the weekend and fuel another leg higher in GBP/USD. On the other hand, markets could continue to lean toward a Fed rate cut in May and help USD find a foothold. According to CME FedWatch Tool, markets are still pricing in a 35% probability of a Fed rate reduction in March.
GBP/USD Technical Analysis
GBP/USD pierced through 1.2700, where the 50-, 100- and 200-period Simple Moving Averages (SMA) on the 4-hour chart are located, and closed the last 4 4-hour candles above that level. Meanwhile, the Relative Strength Index (RSI) indicator rose to 60, confirming the bullish tilt in the short-term outlook.
On the upside, 1.2780 (static level) aligns as interim resistance before 1.2820 (end-point of the latest uptrend) and 1.2860 (static level from July). Strong support is located at 1.2700 before 1.2650 (Fibonacci 23.6% retracement).
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers.