• The dollar was on the back foot on Friday after a week of poor economic data.

• Economists expect the US economy to add 191,000 jobs in June.

• Investors cheered a looming Labour Party majority win in the UK.

The GBP/USD outlook shows an uptrend, with the dollar easing ahead of the US monthly employment report. Meanwhile, the pound rallied as the UK general election pointed to a Labour Party majority win.

The dollar was on the back foot on Friday after a week of poor economic data. Figures on employment and business activity have all pointed to a slowdown in the economy that could push the Fed to consider a rate cut in September. However, investors are still awaiting the major monthly employment report.

Economists expect the economy to add 191,000 jobs in June. This would be a drop from last month when there were 272,000 new jobs in the US. Meanwhile, the unemployment rate might hold steady at 4.0%.

Elsewhere, investors cheered a looming Labour Party majority win in the UK that could mean some political stability in the country. Moreover, the pound is heading for a 1% gain this week against the dollar.

Meanwhile, British employers believe that wage growth will slow in the next year. This would give the Bank of England room to start lowering borrowing costs. Furthermore, the central bank’s forecasts show wage growth dropping by 0.3% on a three-month basis. The BoE could be ready to cut rates by August or September.

GBP/USD key events today

• US average hourly earnings m/m
• US non-farm employment change
• US unemployment rate

GBP/USD technical outlook: Bulls weaken near the 0.618 Fib

On the technical side, the GBP/USD price is on a steep bullish trend, sitting far above the 30-SMA. At the same time, the RSI is in the overbought region, supporting solid bullish momentum. The price recently broke out of a range between the 1.2625 support and the 1.2700 resistance.

Bulls rose quickly but hit a pause when the price reached the 0.618 Fib retracement level. Here, the price started making smaller candles, indicating exhaustion. Consequently, there is a high chance the GBP/USD pair will pause or pull back to retest the 30-SMA support before continuing higher. If the bullish trend continues, the price might revisit the 1.2850 resistance level.

https://www.forexcrunch.com/blog/2024/07/05/gbp-usd-outlook-dollar-dips-as-us-nfp-data-looms/