GBP/USD Forecast: Worries about jobs go both ways, weighing on bulls, all eyes on NFP

• GBP/USD has been retreating from the BOE-inspired highs amid Sino-American tensions.
• US Non-Farm Payrolls and fiscal stimulus talks are eyed. 
• Friday's four-hour chart is painting a bullish picture.

"The furlough program is not sustainable in the long-run" – the words of Rishi Sunak, Chancellor of the Exchequer, provide a reminder that the UK's economic success has its limits., weighing on the pound The UK's unemployment stood at 3.9% in May – the same as pre-pandemic January but it leans heavily on the government paying people most of their salaries while they are at home. 

Sunak's comments come ahead of the UK's employment report due out early next week – see preview – and ahead of the US Non-Farm Payrolls – which carry a high level of uncertainty. 

America's jobless rate was 11.1% as of June and a minor decline is on the cards for July. Economists expect the world's largest economy to have gained 1.5 million positions last month, yet real estimates have likely declined. ADP's private-sector labor figures and the employment components in purchasing managers' indexes have all shown weakness in hiring. 

The NFP could go either way – a gain or a loss of jobs. If the report shows a substantial hit to employment – due to the resurgence of coronavirus – the dollar has room to decline.

See:

• Non-Farm Payrolls complicated by coronavirus and confusing data, dollar, gold implications

• Nonfarm Payrolls Preview: Hints point to an awful July

• US Non-Farm Payrolls July Preview: A dual track labor market or imperfections in the data?

Ahead of the jobs statistics, the dollar is gaining ground due to intensifying Sino-American relations. President Donald Trump has hit TikTok and WeChat – two prominent Chinese tech firms – with strict restrictions on their ability to doing business in the US. The administration is worried about the usage of data – and the president would probably like to talk about China and not his mishandling of the virus. 

Brexit – another ongoing theme from 2016 alongside Trump – is also back to the headlines. The UK government is allocating £355 million pounds to customs controls between Great Britain and Northern Ireland – a customs border in the Irish Sea. Prime Minister Boris Johnson had been denying the need for such checks and this move is coming under criticism that adds to his woes as the coronavirus crisis continues. 

GBP/USD has already more than erased gains related to the Bank of England's optimistic message. The "Old Lady" upgraded its 2020 growth forecasts and hinted negative rates are off the agenda for now. That upbeat tone may return to support sterling once the dust settles from the Non-Farm Payrolls.

All in all, cable bulls have fewer reasons to cheer, but they are not defeated. 

GBP/USD Technical Analysis

Momentum on the four-hour chart remains positive, but it has somewhat diminished. Pound/dollar continues trading above the 50, 100, and 200 Simple Moving Averages, and the Relative Strength Index is outside overbought conditions. 

Support awaits at the daily low of 1.3085, followed by 1.3055, which is where the 50 SMA hits the price. The next lines to watch are 1.2985 and 1.29.

Resistance is at 1.3070, July's high, followed by a fresh peak of 1.3183 and 1.32. Further above, 1.3270 and 1.3320 are of interest. 

More GBP/USD losses momentum at the 1.3165 five-year resistance line – Commerzbank