- The GBP/USD price analysis shows some relief for the pound as the dollar collapses.
- Data on Friday revealed slower-than-expected US job growth in July.
- Trump slapped more countries, like Canada and South Korea, with higher tariffs on Friday.
The GBP/USD price analysis shows some relief for the pound as the dollar collapses on a poor US jobs report. Sterling recorded the worst month in 3 years in July due to UK economic concerns. At the same time, the dollar rallied after Trump imposed tariffs on many more countries on Friday.
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Data on Friday revealed slower-than-expected US job growth in July. The economy employed only 73,000 new workers, compared to the estimates of 106,000. At the same time, unemployment was higher at 4.2%, as expected.
The slowdown in the labor market will increase pressure on the Fed to cut interest rates. Although employment has remained mostly resilient, it has slowed down significantly due to Trump’s tariffs. Moreover, the US president imposed more tariffs on Friday that could further weaken the US economy.
Trump slapped more countries, like Canada and South Korea, with higher tariffs on Friday. The move came after the countries failed to reach trade agreements with the US. As a result, the dollar and Treasury yields rose, weighing on the pound.
The UK currency has had a terrible month amid concerns about the state of the UK economy. Weak economic data has added pressure on the BoE to lower borrowing costs.
GBP/USD key events today
Market participants do not expect more reports at the end of the week.
GBP/USD technical price analysis: Bullish engulfer signals reversal
On the technical side, the GBP/USD price has recovered to the 30-SMA and is challenging the prevailing trend. Bulls emerged soon after the price broke below the 1.3200 key support level. There was a sudden surge in momentum that allowed the price to form a bullish engulfing candle.
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However, the bearish bias remains intact, with the price below the 30-SMA and the RSI slightly under 50. If the SMA holds firm, bears will return to push the price lower and continue the downtrend.
On the other hand, if the SMA gives way, it will confirm a bullish sentiment shift. Nevertheless, bulls would have to break above the 1.3402 key level and start making higher highs and lows to confirm a bullish trend.
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