Pound hits multi-week high as markets await GDP data

The GBP/USD pair climbed to 1.3575 on Thursday, marking a fresh three-week high. The uptick followed encouraging UK labour market data, which showed fewer job losses than anticipated in July, easing economic concerns.

Employment figures revealed a decline of just 8,000 workers—well below the forecasted 20,000—while previous months’ data was revised upwards. This suggests resilience in the labour market, despite the Labour government’s £26 billion tax hike.

The unemployment rate held steady at 4.7%, though private sector wage growth slowed to 4.8%, still significantly above the Bank of England’s (BoE) 2% inflation target. These figures underscore the central bank’s challenge in curbing inflation amid signs of a cooling labour market. Last week, the BoE narrowly voted to cut rates by 25 basis points.

Investors are now turning their attention to Q2 GDP data, expected to show modest growth of 0.1%.

Technical analysis: GBP/USD

Four-four Chart:

On the H4 chart, GBP/USD has corrected to 1.3590. We now anticipate the start of a fifth downward wave, targeting 1.2942, with the first structural support at 1.3280. This scenario is supported by the MACD indicator, where the signal line—currently at its peak—is poised for a downturn.

One-hour Chart:

The H1 chart shows the pair consolidating around 1.3366 before breaking upward and completing a corrective stretch to 1.3590. From here, we expect a new downward wave towards 1.3477, with a breakout potentially extending the decline to 1.3366—the initial target for the bearish trend. The Stochastic oscillator corroborates this outlook, with its signal line below 50 and trending sharply downward towards 20.

Conclusion

While the pound benefits from upbeat labour data, focus now shifts to GDP figures for further direction. Technically, the pair shows signs of potential retracement, with key levels at 1.3477 and 1.3366 in focus.