Nonfarm payrolls in August added only 22,000 new jobs after 79,000 in the previous month, while forecasts stood at 70,000. The labor force participation rate rose from 62.2% to 62.3%, while unemployment increased from 4.2% to 4.3%. Average hourly earnings slowed from 3.9% to 3.7% y/y, though they grew 0.3% m/m. Such weak data strengthened expectations that the Federal Reserve may cut interest rates by 25 basis points at its September 17 meeting, while a 50-point move is still possible. These figures are critical for shaping the upcoming Forex rate forecast for the pound and the dollar.
Following the Fed, the Bank of England may also consider resuming monetary easing, especially as the British economy has less resilience. On Friday, the pound additionally found support from July retail sales, which accelerated to 1.1% y/y from 0.9% (forecast 1.3%) and rose from 0.3% to 0.6% m/m. Still, Financial Times research shows a 0.5% annual decline in employment from June to August, the weakest reading since COVID-19, underscoring pressure from tax changes and higher duties that weigh on wages.
On Friday at 08:00 (GMT+2), July GDP and industrial production figures will be released in the UK, with forecasts pointing to a slowdown from 0.4% to 0.0%.
Support and resistance levels
Bollinger Bands on the daily chart show flat dynamics; the range remains wide enough for current market activity. MACD is turning upward, forming a new buy signal as the histogram aims above the signal line. The stochastic indicator shows a similar upward trend, approaching the 80 mark, which signals risks of overbought conditions in the very short term.
Resistance levels: 1.3554, 1.3600, 1.3632, 1.3700.
Support levels: 1.3500, 1.3450, 1.3415, 1.3364.
Trading scenarios
Short positions may be considered after a confident breakdown of 1.3450 with a target at 1.3364. Stop loss — 1.3500. Implementation period: 2–3 days.
A rebound of bullish dynamics with a breakout above 1.3554 could signal new long positions targeting 1.3700. Stop loss — 1.3500.
Scenario
Timeframe: Intraday
Recommendation: SELL STOP
Entry point: 1.3450
Take Profit: 1.3364
Stop Loss: 1.3500
Key levels: 1.3364, 1.3415, 1.3450, 1.3500, 1.3554, 1.3600, 1.3632, 1.3700
Alternative scenario
Recommendation: BUY STOP
Entry point: 1.3555
Take Profit: 1.3700
Stop Loss: 1.3500
Key levels: 1.3364, 1.3415, 1.3450, 1.3500, 1.3554, 1.3600, 1.3632, 1.3700