bullish trend to 1.400 intact ahead of UK GDP data

The GBP/USD price is hovering near its highest level since August 6 after the US non-farm payroll numbers pointed to a sharp decline in hiring. The pair is trading at 1.3865, which is slightly below last week’s high at 1.3890.

GBP/USD forecast

The GBP/USD will start this week at a relatively muted tone considering that the United States will be in holiday on Monday. 

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Still, the pair will likely continue reacting to the latest US non-farm payrolls data. The numbers, published on Friday, showed that the American economy added just 235k jobs in August. Still, the unemployment rate declined to a post-pandemic low of 5.2%. This is a significant decrease from the previous month’s 5.4%.

At the same time, the country’s participation rate held steady at 61.7% while wages rose by 4.3%. Additional data have also been relatively positive, with the manufacturing and services PMI remaining above 50. 

On Friday, data by the Institute of Supply Management (ISM) showed that the counties non-manufacturing PMI rose to 61.7. That from Markit showed that the services PMI fell slightly to 55.1. Additionally, initial jobless claims have declined to the lowest level since the pandemic started.

The GBP/USD pair will react to the latest UK home prices data. On Tuesday, data by Halifax is expected to show that the country’s home price index rose from 0.4% to 1.1% in August. This will confirm last week’s data from Nationwide that showed that home prices jumped substantially in the previous week. 

The GBP/USD will also react to the latest UK GDP data that will come out on Friday. Analysts expect the final estimate to show that the economy expanded sharply in the second quarter as the economy reopened. 

GBP/USD technical analysis

The three-hour chart shows that the GBP/USD pair has been in a strong bullish trend in the past few weeks. Along the way, the pair formed an ascending channel. And on Friday, it moved slightly above the upper side of this channel, which is further evidence that bulls are in control.The pair has moved slightly above the 25-day and 50-day exponential moving averages (EMA) while the MACD remains above the neutral level. Therefore, the pair will likely maintain the bullish trend as bulls target the key resistance level at 1.4000.