Pound Recovers Against Dollar After Weak US Jobs Report

The British pound is making a comeback against the US dollar early in October, climbing to 1.3237 as it recovers from three-month lows. The rebound follows a disappointing US jobs report, which showed only 29,000 new positions added in September, far below the expected 90,000. This weak data has eased pressure on the Federal Reserve to raise interest rates in October, shifting market focus to a potential move in December.

In the UK, expectations of Bank of England (BoE) rate hikes have grown, with markets pricing in around 30 basis points of tightening by year-end and 90 basis points by 2027. BoE officials, including Governor Andrew Bailey, have hinted at possible rate increases if high energy prices continue to fuel inflation. Meanwhile, political developments are also supporting the pound, with Prime Minister Andy Burnham advocating for closer UK-EU ties ahead of a planned summit in late November.

From a technical perspective, GBP/USD remains in a downward trend on the H4 chart, with key resistance at 1.3303. Analysts anticipate further declines toward 1.3180, with potential downside targets at 1.3108 and 1.3044 if selling pressure persists. The MACD indicator supports this bearish outlook, though a short-term correction may occur before another drop. On the H1 chart, the pair has resumed its decline after a corrective rise, with immediate support at 1.3185.

The overall sentiment remains bearish as long as GBP/USD trades below 1.3252 and 1.3303, with the latter acting as a critical invalidation point for the downward scenario. While a brief recovery could ease short-term pressure, the broader trend is expected to remain downwards.