Last Updated on October 3, 2026 by Deon
I saw the British Pound recover against the US Dollar on Friday after a US employment report that was much weaker than expected. This report lowered expectations for a Federal Reserve interest‑rate hike in October. The GBP/USD climbed back above 1.32 after trading below that level with the pair reaching around 1.3250 during the session.
The move came after the US economy added 29,000 jobs in September far below the market forecast of 90,000. The unemployment rate also went up from 4.1% to 4.2% adding evidence that US labor market conditions are softer.
Weak US Jobs Data Pressures Dollar
The September Nonfarm Payrolls report was the driver behind Friday’s Pound recovery.
US payroll growth of 29,000 was considerably weaker than expected. August payrolls were also revised down from 162,000 to 133,000. The combination of job creation and a higher unemployment rate caused traders to reassess expectations for Federal Reserve policy.
After the report money markets set the probability of the Fed keeping interest rates in October at about 79% according to the FXStreet report. Thus expectations for an October rate hike were reduced.
A lowered likelihood of US interest rates can weigh on the Dollar by lowering the expected return from US assets. This helped the GBP/USD recover from its decline.
GBP/USD Moves Back Above 1.32
The GBP/USD rebounded after finding buyers below 1.3200. The pair traded near 1.3250 after the employment data was released.
However the broader technical picture stayed cautious. FXStreet analysis showed that the GBP/USD traded below a cluster of moving averages around 1.3453 while a descending resistance trend line lay near 1.3313.
This means the recovery has not yet removed the technical pressure. Traders may keep watching how the GBP/USD behaves around the 1.33 area before deciding if the rebound can extend.
1.3313 Becomes Key Resistance
The 1.3313 region is a technical level for the GBP/USD.
A sustained move above this descending trend line could show improving short‑term momentum. The next resistance area is near 1.3434, followed by the moving‑average cluster near 1.3453.
Above those levels another trend‑line barrier lies near 1.3544. The higher structural area near 1.3745 is another level traders may watch if the Pound stages a recovery.
On the downside the GBP/USD’s reaction around 1.3200 stays important after Friday’s bounce.
BoE Expectations Support Sterling
While US monetary policy was the reason for Friday’s move expectations about the Bank of England also stay relevant for Sterling.
Market participants priced about 30 basis points of Bank of England tightening by the end of the year and around 90 basis points by 2027 according to the FXStreet report.
These expectations can influence the Pound because changes in UK interest‑rate expectations affect the yield from Sterling‑denominated assets.
Week’s UK calendar is expected to include speeches from Bank of England officials Mann and Lombardelli. Their comments could give information about the central bank’s view of inflation and interest rates.
RSI Shows Continued Pressure
Technical indicators still give a picture.
The daily Relative Strength Index was 33.9, just above oversold territory. This shows that downside momentum was still there although the indicator also showed that selling pressure might be losing some strength.
An RSI near 30 is often watched by traders because it can show that an asset has had recent selling. It does not by itself confirm a reversal.
For the GBP/USD, price action around resistance levels remains important.
US Data Remains in Focus
The US economic calendar will stay important for the GBP/USD in sessions.
Upcoming releases include the ISM Services PMI, the FOMC meeting minutes, jobless claims and the University of Michigan Consumer Sentiment report.
These reports could influence expectations for Federal Reserve policy. Therefore affect the Dollar.
If more US data points to economic activity traders could keep reassessing the outlook for interest rates. Conversely stronger figures could support expectations for policy and could influence the GBP/USD.
Key GBP/USD Levels to Watch
Traders can keep an eye on important technical areas:
1.3200: GBP/USD recent support area after the NFP‑driven rebound.
1.3250: GBP/USD current trading area highlighted in the FXStreet report.
1.3313: GBP/USD descending trend‑line resistance.
1.3434: GBP/USD additional resistance, above 1.3313.
1.3453: GBP/USD cluster of moving averages.
1.3544: GBP/USD higher trend‑line resistance.
1.3745: GBP/USD important longer‑term structural level.
These levels can help traders assess whether the recent recovery is developing into a move or remains a short‑term reaction to US employment data.
Pound Price Outlook
The British Pound has recovered as US employment data reduced expectations for an October Federal Reserve rate hike. GBP/USD moved back above 1.32 after falling below the level in the session.
The next major test is around 1.3313. A sustained move above that area would put 1.3434 and the 1.3453 moving‑average zone into focus. Meanwhile renewed selling below 1.3200 would keep pressure on the pair.
For now GBP/USD remains sensitive to changes in Fed expectations US Treasury yields, upcoming US economic releases and Bank of England communication. Traders are likely to watch these factors as markets reassess the interest‑rate outlook on both sides of the Atlantic.
