GBP/USD slips as strong US jobs data cools Fed rate cut bets

• Sterling still set for weekly gain over 0.80% amid broad Greenback weakness earlier in the week.
• US economy added 139K jobs in May, beating forecasts and reinforcing Fed's cautious stance on rate cuts.
• Dollar strength resurfaces, with DXY climbing 0.58% to 99.28, its highest in two days.

GBP/USD tumbled during the North American session, down over 0.30% after the latest jobs report in the United States (US) maintained the status quo, with the economy remaining strong. The pair traded at 1.3526 after hitting a daily high of 1.3586.

Pound retreats below 1.3550 after NFP beats estimates, lifting the US Dollar and dampening dovish expectations

US Nonfarm Payroll figures in May exceeded estimates of 130K, rising by 139K, which was below April's downwardly revised 147K. Although the jobs market shows that it's softening, beating economists' estimates, it pushed aside traders' bets that the US Federal Reserve (Fed) will cut interest rates in 2025.

The data revealed that the Unemployment Rate remained unchanged at 4.2%, and that the Federal Government cut 10,000 jobs in the past month.

A scarce economic docket in the UK, kept GBP/USD traders leaning onto US news. In addition, Sterling is poised to post gains of over 0.80% in the week, sponsored fy broad UA Dollar weakness.

Despite this, the buck has recovered some ground, as depicted by the US Dollar Index (DXY). The DXY, which tracks the value of the American dollar against a basket of six currencies, climbed 0.58% to 99.28, its highest level in two days.

Next week, the UK economic docket will feature jobs data and gross Domestic Product (GDP) figures for April. Across the pond, the US schedule will announce the latest Consumer Price Index (CPI), followed by the Producer Price Index (PPI) and the University of Michigan Consumer Sentiment.

GBP/USD Price Forecast: Technical outlook

The trend remains up, as GBP/USD buyers tested the 20-day Simple Moving Average (SMA) at 1.3509. If this level holds, the pair's direction would likely resume in the short term after making successive series of higher highs and higher lows, warranting further upside.

However, momentum has taken a hit. The Relative Strength Index (RSI) is aiming lower, hints that sellers are moving in.

If GBP/USD stays above 1.3500, this opens the door for a move to 1.3584 today's high, followed by the year-to-date (YTD) high at 1.3616. On the other hand, a daily close below 1.35 could sponsor a drop towards April's 28 sing high turned support at 1.3443 ahead of the 1.34 mark.