FX.co ★ Helsinki | GBP/USD

The British pound started the new trading week on a slightly softer note, drifting further away from the more than three-week high touched last Friday just above the 1.3500 psychological mark. The US dollar is attempting to extend its rebound from post-NFP lows, with ongoing uncertainty surrounding the Middle East crisis and efforts to reopen the Strait of Hormuz keeping markets on edge. That dynamic is creating headwinds for GBP/USD, though downside space appears limited as cooling bets on Federal Reserve rate hikes could prevent any substantial dollar appreciation. Last Friday's much-anticipated US employment report showed that the economy lost 23,000 jobs in July, while June's figure was revised down to 20,000 from the initially reported 57,000. That's a clear sign that the labor market is losing momentum. Traders responded quickly, pricing in less than a 45% probability of a September rate hike, down from 67% just a week ago. However, the story isn't entirely one-sided. Concerns that a rebound in oil prices could reignite inflationary pressures have kept investors still pricing in a higher probability of at least one more 25-basis-point hike before year-end. That means the market is far from convinced that the Fed is done tightening, which could limit the downside for the dollar. On the UK front, Thursday's preliminary second-quarter GDP report will be a key event for pound traders, offering the latest snapshot of the British economy's health. A strong reading could bolster the case for further BOE tightening and give the pound a boost. However, given the mixed fundamental backdrop, some caution is warranted before placing aggressive bullish bets on GBP/USD. The pair has been on an upward trend for nearly two weeks, but with inflation data, GDP figures, and geopolitical risks all converging, the path ahead is far from clear.

GBP/USD is currently trading at 1.3485, hovering just above the 50-period SMA on the hourly chart, which sits at 1.3461, meaning the price is trading roughly 24 pips above the shorter average and about 55 pips above the 200-period SMA at 1.3430. That's a bullish setup on the short-term horizon, with the 50 SMA above the 200 SMA forming a golden cross that signals upward momentum is intact. The gap between the two hourly averages is about 31 pips and widening, suggesting that the current uptrend is gaining traction. The fact that both averages are sloping upward reinforces the positive short-term picture. Stepping back to the four-hour chart, the outlook remains similarly constructive. The 50 SMA sits at 1.3433 while the 200 SMA is positioned lower at 1.3365, meaning price is trading roughly 52 pips above the 50 SMA and about 120 pips above the 200 SMA. That's a strongly bullish configuration on the intermediate timeframe, with the H4 50 SMA above the H4 200 SMA confirming that the broader trend is firmly to the upside. The gap between the two H4 averages is about 68 pips and expanding, suggesting that the uptrend is well-established and gaining momentum. Now let's look at the horizontal levels that exist independently of the moving averages. On the resistance side, the first hurdle is 1.3500, the psychological round number that marked last week's high and has proven to be a sticking point. Above that, the next supply zone runs from 1.3525 to 1.3540, followed by a heavier barrier at 1.3565. If buyers manage to clear all of that, the next targets are 1.3590 and then 1.3615. On the support side, the first floor is at 1.3461, which aligns closely with the hourly 50 SMA, adding extra weight to this level. A break below that opens the door to 1.3440, then 1.3420, which aligns with the hourly 200 SMA and the H4 50 SMA, making it a confluent support zone where buyers are likely to step in. Further down, the next cushions are at 1.3395 and then 1.3370, which marks a deeper demand zone from early July.