The Pound Sterling has dropped back to about 1.3700 against the US Dollar. This change follows positive data from the US, which reported 7.769 million job openings in May, exceeding expectations of 7.3 million. This strong data has boosted the US Dollar, helping the Dollar Index rise to around 96.90 after a nine-day decline. In the UK, Bank of England Governor Andrew Bailey raised concerns about the labor market, mentioning how global risks add uncertainty to economic activity. The Bank may consider reducing interest rates later this year, although no specific plans were shared at the recent European Central Bank summit.

Impact Of US Economic Data

US Dollar movements are also affected by fiscal pressures, like President Trump’s tax bill and criticism of Federal Reserve Chair Jerome Powell regarding interest rate cuts. Attention is on the upcoming release of June’s ADP Employment Change data, which is expected to show 95,000 new jobs. This could influence views on monetary policy. Recently, the Pound Sterling has been fluctuating. The 20-day Exponential Moving Average is near 1.3600, providing short-term bullish support. The 14-day Relative Strength Index indicates positive momentum, with 1.3630 as a support level and 1.4000 as a psychological barrier for the GBP/USD pair. After recent movements, the Pound has lost some ground, moving back towards the 1.3700 mark against the US Dollar. This drop followed the unexpectedly strong US jobs data; the Job Openings and Labor Turnover Survey (JOLTS) reported close to 7.8 million in May, exceeding predictions by nearly half a million. This led to new strength for the Dollar and ended a short-term downtrend in the broader Dollar Index, now stabilizing near 96.90. Governor Bailey spoke about ongoing uncertainties, both domestically and internationally. His comments on the challenges in the UK labor market hint at potential future policy changes, but not any immediate action. While it seems unlikely that rates will rise soon, a cut later this year might be on the table, though nothing is confirmed. Traders should note that Bailey did not mention any specific economic triggers for the Bank’s action, suggesting a reactive, rather than proactive, policy approach.

Monetary Policy Influences

Across the Atlantic, there is growing concern over the Federal Reserve’s independence, particularly due to political pressures related to tax policy and recent statements by Trump. This scrutiny makes the Fed’s monetary policy feel less insulated. The ADP Employment Change figure is often a speculative indicator ahead of the official nonfarm payrolls report. This week’s forecast of 95,000 jobs added could shift rate expectations quickly, depending on actual results. Markets are attempting to balance the Fed’s cautious stance with political calls for monetary easing. Technically, the GBP/USD pair shows a supportive structure. The 20-day EMA is around 1.3600, and the price has kept this level as support during pullbacks. The RSI over the past two weeks indicates a continued interest in upward movement, although it has been more measured lately. Traders should keep an eye on the 1.3630 level—dropping below that heightens risks. Resistance at 1.4000 remains a goal, but a subtle position below that point could indicate future direction. In the coming sessions, trader strategies—especially around upcoming US data—will be crucial in determining whether the pair can hold its ground or face renewed pressure from the strengthening Dollar. Stay alert and pay close attention to support levels like 1.3630. Falling below that would require a response, especially with the broader index bouncing back. Create your live VT Markets account and start trading now.

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