GBP/USD slides toward 1.33 as weak UK jobs data fuels BoE rate cut bets

• UK jobless rate ticks up to 4.8% while hiring momentum slows sharply in latest report.
• Traders push back BoE easing expectations despite soft labor data and sluggish growth signs.
• Dollar steady ahead of Powell's speech as US business sentiment declines, signaling possible slowdown.

GBP/USD prolongs its losses for the second consecutive day during the week as soft data in the UK justifies the need for lower interest rates by the Bank of England. The extension of the government shutdown in the US, keeps the schedule light, except for Fed Chair Jerome Powell speech.

Sterling falls for a second day as unemployment rises and wages ease, bolstering dovish expectations

Sterling trades at around 1.3300 after hitting a daily high of 1.3352 and failing to crack last Friday peak of 1.3370, following the latest employment report in Britain. The data showed that the unemployment rate rose, and wage earnings slowed in the three months to August.

The ILO Unemployment Rate in August increased from 4.7% to 4.8% MoM, while the Employment Change dipped from 232K to 91K, below estimates of 123K people added to the workforce.

Further data showed that Average Weekly Earnings in the three months to August climbed from 4.8% to 5%, but excluding bonuses, dipped from 4.8% to 4.7%, for the same period.

Today's data provides reasons for doves at the Bank of England (BoE) to cut interest rates. Nevertheless, market participants remain skeptical for further easing this year, as they expect the next cut until March 2026.

Trade tensions between the US--China, pushed the Dollar lower as depicted by the US Dollar Index (DXY), which tracks the buck's value against six currencies, is down 0.07% at 99.17. Traders are eyeing the Fed Chair Jerome Powell speech, late in the day.

Data in the US revealed that small business sentiment declined in September, due to expectations of unfavorable operating conditions in the following six months, revealed the National Federation of Independent Business (NFIB). The NFIB Business Optimism Index tumbled 2.0 points to 98.8 last month, the first decline in three months.

GBP/USD Price Forecast: Technical outlook

The technical picture indicates the GBP/USD is neutral to downward biased, and a daily close below 1.33 could set the stage to test lower prices. Momentum is also bearish as depicted by the Relative Strength Index (RSI).

That said, the first support would be 1.3200. A breach of the latter will expose the 200-day Simple Moving Average (SMA) at 1.3178. Conversely, if GBP/USD climbs above 1.33, the next resistance would be 1.3350, followed by the 20-day SMA At 1.3434. The next key resistance lies at the 50-day SMA and the 100-day SMA, each at 1.3472 and 1.3488, respectively.