The GBPUSD pair is on track to wrap up the week in the green, trading near 1.33600 on Friday morning after hitting 14-day highs. So, what was the catalyst? A sharp dollar sell-off triggered by disappointing US labor market data.
Let’s take a closer look at the numbers. Nonfarm Payrolls came in at just 57,000—a pale shadow of the 110,000 consensus forecast. To make matters worse, the previous two months were revised down by a cumulative 74,000, leaving little doubt that the jobs market is cooling. Such a sobering reality has triggered a rapid rethink on Federal Reserve (Fed) monetary policy: the odds of a September rate hike have crashed from 66% to 52%. As a result, two-year Treasury yields have taken a hit, and the dollar index (DXY) has shed more than 0.5%, giving sterling a nice tailwind.
However, the pound’s resilience isn’t just about the greenback weakness. The situation in the United Kingdom is much better now. Andy Burnham—Keir Starmer’s apparent successor—has promised to play by fiscal rules, dialing back the political risk premium and allowing sterling to push above 1.33. On the monetary front, the Bank of England (BoE) is sitting tight at 3.75%, providing a steady hand. Markets are still pricing in a nearly 90% chance of a rate rise before the year is out—a clear vote of confidence in the UK’s policy trajectory. Sure, declining business confidence and shrinking real incomes remain nagging concerns, yet they are being overshadowed by the pound’s bullish momentum.
From a technical perspective, GBPUSD is in full recovery mode. After four straight days of gains from the recent floor near 1.31390, the pair is now camped around 1.33600. The Chaikin Oscillator has rocketed into positive territory—a dead giveaway that money is flowing in and buying pressure is building. Add a string of green candles to the mix, and the message is plain: bulls have finally taken the wheel.
For those ready to get in, pay attention to the trading plan down below:
Buy GBPUSD from current levels, namely at 1.33600. Place Take profit at 1.34500. Set Stop loss at 1.32900.
This forecast holds true from July 3 till July 10, 2026.
