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GBP/USD slips after blockbuster NFP revives Fed hold outlook

  • March payrolls beat forecasts by a wide margin, boosting the US Dollar.
  • Softer services data failed to offset the impact of strong jobs figures.
  • Traders trimmed dovish Fed bets as Treasury yields edged higher.

The GBP/USD extended its losses for the second straight day, down 0.12% after a stellar US Nonfarm Payrolls report, which could refocus the Federal Reserve on battling higher inflation that has remained above target for five years. At the time of writing, the pair trades at 1.3205.

Strong payrolls and firmer yields keep Sterling on the back foot

The US Bureau of Labour Statistics (BLS) revealed that the economy created over 178K jobs in March, crushing forecasts of 60K. Despite the positive reading, February’s print was further downwardly revised to -133K, but on a positive note, the Unemployment Rate also fell to 4.3%, down from 4.4%.

In the meantime, the US Dollar Index (DXY), which tracks the American currency's performance versus six peers, is up a minimal 0.12% and back above the 100.00 handle amid growing speculation that the Fed would maintain steady interest rates as the Middle East conflict prolongs.

Recently, the US S&P Global Services PMI contracted in March for the first time since January 23, falling from 51.7 in February to 49.8. Chris Williamson, Chief Business Economist at S&P Global Market Intelligence, wrote: “The PMI survey data show the US economy buckling under the strain of rising prices and intensifying uncertainty, as the war in the Middle East exacerbates existing concerns regarding other policy decisions in recent months, notably with respect to tariffs.”

Williamson commented that the stagflationary environment of no growth and surging prices is a challenge for policymakers, as the S&P survey revealed a slowdown in employment.

Data from the Chicago Board of Trade (CBOT) showed investors trimmed dovish bets and predicted the Fed would hold rates flat for the year. US Treasury yields, particularly the 2-year, edged higher following the NFP release.

GBP/USD price analysis: Technical outlook

Chart Analysis GBP/USD

In the daily chart, GBP/USD trades at 1.3205. The near-term bias is mildly bearish as spot holds below the clustered Simple Moving Averages (SMAs) surrounding 1.3550, confirming a loss of upside momentum after repeated failures along the descending resistance trendline that started at 1.3869. Price has also slipped away from the prior series of higher supported closes along the rising trendline from 1.3035, shifting the focus toward defending recent lows rather than extending gains. The FXS Fed Sentiment Index continues to grind higher, underscoring a firmer US Dollar backdrop that keeps rallies in GBP/USD vulnerable while the pair trades beneath the broken resistance zone.

Initial resistance emerges at the psychological 1.3300 region, where prior rebounds stalled ahead of the descending trendline, followed by 1.3400 and then the 1.3500 area aligning with the grouped moving averages that cap the upside. On the downside, immediate support is at 1.3200, just below the current price, with a break exposing 1.3100 and then the 1.3035 rising trendline origin. A daily close below this latter band would confirm a deeper bearish extension, while recovery above 1.3400 would ease the immediate downside pressure and open a broader retracement toward 1.3500.

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

Pound Sterling Price This week

The table below shows the percentage change of British Pound (GBP) against listed major currencies this week. British Pound was the strongest against the New Zealand Dollar.

USDEURGBPJPYCADAUDNZDCHF
USD-0.19%0.45%-0.37%0.43%-0.39%0.98%0.40%
EUR0.19%0.63%-0.22%0.60%-0.20%1.17%0.59%
GBP-0.45%-0.63%-0.80%-0.02%-0.83%0.54%-0.07%
JPY0.37%0.22%0.80%0.81%0.01%1.37%0.69%
CAD-0.43%-0.60%0.02%-0.81%-0.84%0.55%-0.06%
AUD0.39%0.20%0.83%-0.01%0.84%1.38%0.75%
NZD-0.98%-1.17%-0.54%-1.37%-0.55%-1.38%-0.61%
CHF-0.40%-0.59%0.07%-0.69%0.06%-0.75%0.61%

The heat map shows percentage changes of major currencies against each other. The base currency is picked from the left column, while the quote currency is picked from the top row. For example, if you pick the British Pound from the left column and move along the horizontal line to the US Dollar, the percentage change displayed in the box will represent GBP (base)/USD (quote).

Author

Christian Borjon Valencia

Markets analyst, news editor, and trading instructor with over 14 years of experience across FX, commodities, US equity indices, and global macro markets.

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