GBP/USD Price Forecast: Reflects strength above 20-day EMA ahead of UK job data

GBP/USD rises to near 1.3333 ahead of the UK employment data for three months ending August.
This week, other notable UK economic releases are the CPI, Retail Sales and flash S&P Global PMI data.
AI jitters continue to keep the US Dollar under pressure.

The British Pound (GBP) is up 0.22% higher at around 1.3333 against the US Dollar (USD) during the Asian session on Tuesday. The GBP/USD pair trades higher ahead of the United Kingdom (UK) labor market data for three months ending August, which will be published at 06:00 GMT.

According to estimates, the ILO Unemployment Rate increased to 5% from 4.9% in three months ending July. Average Earnings Including Bonuses, a key measure of wage growth, drops to 3.8% Year-on-Year (YoY) from the previous reading of 3.9%. However, the wage growth measure Excluding Bonuses is seen higher at 3.6% YoY from 3.5% in quarter ending July.

The employment data is expected to have a significant impact on Bank of England’s (BoE) monetary policy expectations.

This week, the major trigger for BoE’s policy expectations is expected to be the Consumer Price Index (CPI) data for September, which will be released on Wednesday. Other notable UK economic data releases are Retail Sales for September and the preliminary S&P Global PMI for October, which are scheduled for Friday.

Meanwhile, the US Dollar remains under pressure amid concerns regarding Artificial Intelligence (AI) spending by United States (US) hyperscalers. As of writing, the US Dollar Index (DXY), which gauges the Greenback’s value against six major currencies, trades 0.2% lower to near 101.77.

US Dollar Price Last 7 Days

The table below shows the percentage change of US Dollar (USD) against listed major currencies last 7 days. US Dollar was the weakest against the New Zealand Dollar.

The heat map shows percentage changes of major currencies against each other. The base currency is picked from the left column, while the quote currency is picked from the top row. For example, if you pick the US Dollar from the left column and move along the horizontal line to the Japanese Yen, the percentage change displayed in the box will represent USD (base)/JPY (quote).

GBP/USD Technical Analysis

In the daily chart, GBP/USD trades at 1.3333. The pair holds above the 20-day exponential moving average (EMA) at 1.3289, which suggests a mildly bullish near-term bias as buyers defend the recent recovery off last week’s lows. The Relative Strength Index (14) at 52.8 sits just above the neutral band, hinting that upside momentum is constructive but not yet stretched.

On the downside, immediate support is seen at the 1.3333 area as an intraday pivot, followed by the 20-day EMA at 1.3289, where a deeper pullback would likely attract fresh demand. With no major technical barriers overhead in this dataset, the pair would need a clear break below 1.3289 to undermine the current positive tone and expose a more corrective phase.

(The technical analysis of this story was written with the help of an AI tool. Know more.)

Economic Indicator

ILO Unemployment Rate (3M)

The ILO Unemployment Rate released by the UK Office for National Statistics is the number of unemployed workers divided by the total civilian labor force. It is a leading indicator for the UK Economy. If the rate goes up, it indicates a lack of expansion within the UK labor market. As a result, a rise leads to a weakening of the UK economy. Generally, a decrease of the figure is seen as bullish for the Pound Sterling (GBP), while an increase is seen as bearish.