GBP/USD Price Forecast – Pound Drops After Non-farm Payroll

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Published: Feb 2, 2024, 16:56 UTC

The British pound has fallen rather hard during the Friday session after the nonfarm payroll announcement in the United States. This was not just the British pound though, it also was seen across the board.

GBP/USD Forecast Video for 05-02-2024

British Pound vs US Dollar Technical Analysis

British pound has gotten shellacked during the Friday trading session as the jobs number in the United States came out much hotter than anticipated. By doing so, it looks to me like a market that is reaching the bottom of an overall consolidation area. And of course is also touching the crucial 50 day EMA, which in and of itself probably will get people interested. The market is moving on the jobs number coming out hotter than anticipated, and, in fact, it came out about twice as many jobs as anticipated in America. So the idea, of course, is that the Federal Reserve is now going to have to wait to tighten monetary policy, but I don’t know if that changes anything because it just sends us to the bottom of the range that we have been in.

Above we have the 1.2750 level offering significant resistance and if we can get above there on a daily close, then I might be convinced to start buying. As far as selling is concerned, I would need to see a breakdown below the 1.25 level on a daily close to do so. In the meantime, if you are a short-term range bound trader or even a scalper, this is probably a great market for you as we have done essentially nothing, but engaged in Brownian motion for the last several months.

It looks at this point like we are in perfect balance and nobody really has the inertia to push the market in one direction or the other. Having said that, once a consolidation like this gets broken, it typically leads to a much bigger move. So I will certainly keep watching this chart. It’s just that right now there’s nothing compelling to do. However, this could be one of the big stories in the Forex markets later this year once we finally do move out of this little consolidation, because there is so much pent-up energy in this market right now that it should release a wave of massive momentum.

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About the Author

Christopher Lewisauthor

Being FXEmpire’s analyst since the early days of the website, Chris has over 20 years of experience across various markets and assets – currencies, indices, and commodities. He is a proprietary trader as well trading institutional accounts.