GBP/USD slumps as strong US jobs data lifts US Dollar

The Pound Sterling (GBP) resumes its downtrend for the week on Thursday, courtesy of heightened tensions in the Middle East and solid US employment data ahead of Friday's Nonfarm Payrolls report. At the time of writing, GBP/USD trades at 1.3337, down 0.25%.

Risk aversion from Middle East tensions and firm labor data keep Sterling under pressure

Risk appetite remains deteriorated as hostilities between the US, Israel and Iran entered their sixth day. Wall Street opened lower on Thursday, while the Greenback rallies for the third day of the week, according to the US Dollar Index (DXY).

The DXY, which measures the buck’s value against six currencies, is up 0.25%, stuck at 99.00.

Economic data in the US revealed that the labor market remains solid. Initial Jobless Claims for the week ending February 28 were unchanged at 213K, from upward revised figures of the last week, revealed the Labor Department. Estimates were seen at 215K, and fears of further deterioration are fading, as revealed by Fed officials in the Beige Book.

Policymakers revealed that the labor market is “generally stable in recent weeks as seven of the twelve districts reported no change in hiring.”

Other reports showed that companies fired 48.3K people in February, down 55% from January, as revealed by Challenger, Gray & Christmas.

In the meantime, Richmond Federal Reserve (Fed) President Thomas Barkin was slightly hawkish, saying that recent inflation data raises doubts about whether the Fed has finished its inflation fight.

In the UK, the economic docket remains absent, yet pressures are mounting over Prime Minister Keir Starmer, following local elections in Manchester, in which his Labour Party lost.

Aside from this, traders' focus is on the US NFP report, with analysts estimating the creation of 59K jobs, and the Unemployment Rate to remain steady at 4.3%.

GBP/USD Price Forecast: Technical outlook

In the daily chart, GBP/USD trades at 1.3331. The near-term bias is mildly bearish as spot hovers below the cluster of simple moving averages, which are rolling over near 1.3500 and now track above price as dynamic resistance. The failed attempt to hold above the prior ascending support line, broken near 1.3597, reinforces the loss of upside momentum and aligns with the prevailing downward pressure suggested by the latest sequence of lower closes. The descending resistance trend line from 1.3869 continues to cap bounces and frames the broader corrective phase.

Initial resistance is seen around 1.3400, where the broken support line and nearby moving averages converge, with the descending trend line strengthening a wider cap closer to 1.3500. A daily close above 1.3500 would be needed to weaken the bearish setup and open the way toward 1.3600. On the downside, immediate support sits at the recent low near 1.3300, followed by 1.3250 and then 1.3200, where earlier reactions congregated. A break below 1.3300 would likely extend the decline toward the mid-1.31 area, in line with the current downtrend structure.

(The technical analysis of this story was written with the help of an AI tool.)