The Pound Sterling (GBP) advances on Thursday during the North American session, up 0.25% after US economic data showed that the labor market remains solid, despite a weaker Nonfarm Payrolls in July. The GBP/USD pair trades at 1.3639 after reaching a daily high of 1.3659, its highest level since February.
GBP/USD rises as UK inflation offsets solid US labor data
The Greenback has recovered some ground after posting losses, following the US Department of the Treasury's announcement of a bond buyback program. The Treasury’s goal is to provide liquidity for the long end of the curve, but markets interpreted the move as a form of Yield Curve Control (YCC).
The US Dollar Index (DXY), which measures the buck’s performance against a basket of six currencies, remains steady at 98.79, after refreshing two-and-a-half-month lows at 98.55, a level last seen in May 14.
Data-wise, the US Initial Jobless Claims for the week ending August 15 dipped from 212K down to 206K, below forecasts of 210K. At the same time, the 4-week average of jobless claims edged up from 199.75K to 204K.
Recently, Federal Reserve (Fed) officials crossed the wires. St. Louis Fed Alberto Musalem said that strong growth and investment are influencing the bond market. He added that in July, he recommended raising rates, but for the September meeting, he remains open.
Earlier, San Francisco Fed Mary Daly said that a rise in long-term bond yields is a global issue, which reduces its usefulness as a signal for the Fed. She added that she doesn’t see Fed credibility as at risk and is making the case that the short end is reacting to the data.
In the UK, inflation hit a four-month high in July as confirmed by data released on Wednesday. Expectations that the Bank of England will raise rates in 2026 remain high, with traders expecting 25 basis points of tightening by the December meeting, as revealed by Prime Terminal.
Source: Prime Terminal
In the meantime, traders are eyeing the release of UK Retail Sales for July, which are expected to show that consumer spending decelerated. In addition, traders will eye S&P Global Flash PMIS. Across the pond, the US schedule will feature S&P Global Flash PMIs, amid a scarce week of data releases.
GBP/USD Price Forecast: Technical outlook
GBP/USD daily chart
In the daily chart, GBP/USD trades at 1.3636, maintaining a bullish near-term bias as price holds above the cluster of former descending trend-line resistance now turned support around 1.3499–1.3409 and the 50/100/200-day simple moving average (SMA) group near 1.3390. The upward-sloping support lines, with break points at 1.3609 and 1.3366, reinforce the constructive structure, while the Relative Strength Index (14) at 70.49 edges into overbought territory, hinting that upside momentum is strong but vulnerable to consolidation.
On the downside, immediate support emerges at the recent highs around 1.3609, followed by the broken trend-line levels at 1.3499 and 1.3409, and then the dense SMA floor near 1.3390, with the lower rising trend-line break at 1.3366 acting as a deeper structural base. With no clear resistance levels defined above the market in the current dataset, the pair would likely need an overbought correction before bears can challenge this supportive zone, keeping the broader path of least resistance skewed to the upside while these levels hold.
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