GBP/USD remains confined in a range near mid-1.1500s post-NFP, seems vulnerable

The GBP/USD pair continues with its struggle to gain any meaningful traction and remains confined in a narrow range through the early North American session. The pair is currently placed around the mid-1.1500s and moves little following the release of the US monthly jobs report.

The slightly better-than-anticipated headline NFP print, showing that the US economy added 315K jobs in August, was offset by an unexpected rise in the unemployment rate - to 3.7% from 3.5% previous. Adding to this, Average Earnings growth slowed to 0.3% during the reported month, down notably from July's upwardly revised 0.5%. The US dollar added to its intraday losses in reaction to the data, though hawkish Fed expectations help limit deeper losses.

In fact, the markets are still pricing in a greater chance of a supersized 75 bps Fed rate hike move at the September policy meeting. This remains supportive of elevated US Treasury bond yields, which, in turn, should assist the USD to stall its corrective pullback from a two-decade high touched on Thursday. Apart from this, a bleak outlook for the UK economy further contributes to keeping a lid on any meaningful upside for the GBP/USD pair, at least for now.

Nevertheless, spot prices remain well within the striking distance of the lowest level since March 2020 set the previous day and seem vulnerable to sliding further. Bearish traders, however, might prefer to wait for a convincing break below the 1.1500 psychological mark before positioning for an extension of the depreciating move. Nevertheless, the fundamental backdrop suggests that the path of least resistance for the GBP/USD pair is to the downside.

Technical levels to watch