GBP/USD grapples with recovery ahead of quiet end to the week

• GBP/USD pumped the brakes on a near-term bearish turnaround.
• US NFP numbers cooled market fears after thumping forecasts.
• US holiday Friday will make for a quiet end to a bumpy week.

GBP/USD churned away near the low-end of a near-term decline on Thursday, bolstered by selling pressure forcing the US Dollar lower after US Nonfarm Payrolls (NFP) jobs data came in hotter than expected. Markets were expecting a below-forecast print after this week's ADP jobs preview showed a sharp contraction in private payrolls, but a steep increase in government-based education hiring offset declines in private sector employment.

Friday is set to fizzle in market impact terms. The US side of markets shuttered early on Thursday, and will remain closed for the US holiday on Friday. A mid-tier public appearance from Bank of England (BoE) policymaker Alan Taylor is slated for Friday, but is unlikely to move markets. There is little else of material importance on the UK side of the data docket for Friday.

The UK government is grappling with a lopsided economic slowdown, and UK Prime Minister Kier Starmer is struggling to maintain control of things. The PM has come under fire for failing to deliver steep cuts to welfare payments that were a key pillar of his election policies, and also avoided taking tax hikes off the table entirely, drawing ire from both markets and UK political proponents alike.

Strong gains on headline US NFP net job increases have also pummeled broad-market rate cut hopes. June's jobs beat has obliterated any market expectations for a rate cut at the Federal Reserve's (Fed) upcoming rate call at the end of the month, and odds of three rate cuts before the end of the year have also been called into question.

GBP/USD price forecast

GBP/USD recovered some of its footing on Thursday, pulling back slightly after a midweek stumble dragged Cable bids sharply lower. The pair retested a rising trendline near the 1.3600 handle, finding technical support and halting downside momentum.

GBP/USD is holding well into bullish territory as the US Dollar flounders across the board, and the Pound Sterling is poised to continue holding near multi-year highs. However, bidders will first have to overcome the latest technical ceiling priced in just south of 1.3800.

GBP/USD daily chart