FX.co ★ Der | GBP/USD

The British pound faced downward pressure at the start of European trading, falling by about 0.26% against the dollar to near the 1.3200 level. The pound weakened as the dollar outperformed other major currencies, driven primarily by safe-haven demand amid growing European financial concerns, particularly France's rising debt burden and political instability. Meanwhile, the dollar index, which measures the dollar's value against a basket of six major currencies, rose by about 0.42%, approaching its highest level this year at 102.53. The dollar's strong upward momentum continued despite traders significantly lowering their expectations for monetary policy tightening at the upcoming Federal Reserve meeting in October. Market sentiment underwent a significant shift following the release of the US non-farm payrolls report, which showed a slowdown in domestic job growth. According to the CME FedWatch tool, the probability of the Federal Reserve leaving interest rates unchanged at this meeting jumped to about 82.3%, a substantial increase from around 35.8% the previous week. Following the release of the employment data, market attention quickly shifted to key domestic economic data, including the expected US services sector Purchasing Managers' Index (PMI), which is forecast at 55.7. This index is a crucial indicator of the overall resilience of the economy and the health of the services sector. Technically, the daily chart for the GBP/USD pair shows a continuation of the short-term downtrend, with the spot exchange rate continuing to trade below the 20-day exponential moving average (EMA), which is currently around 1.3324. This moving average is acting as an immediate resistance level, indicating that sellers are in control of the market in the short term, while buyers are struggling to recover the broken trendline. Meanwhile, the 14-day Relative Strength Index (RSI) is approaching 33, hovering above oversold territory, suggesting that while the downward momentum persists, the overall pace of selling is gradually slowing rather than accelerating. On one hand, the initial technical resistance level is clearly formed at the 20-day moving average at 1.3324, a key resistance level that buyers must break to alleviate the current selling pressure and pave the way for a potential pullback. This is followed closely by the psychological level at 1.3300, which represents an intermediate resistance level. On the other hand, the key support level since the beginning of the year lies around 1.3140; if this key resistance level is breached, the exchange rate could fall further to 1.3100, and perhaps eventually to the key psychological support level at 1.3000.