British Pound rises as soft ADP jobs report weighs on Dollar, NFP looms

The British Pound Sterling (GBP) experienced a rise of 0.12% on Wednesday amid a decline in the US Dollar (USD), following softer-than-expected US job data. The GBP/USD pair currently trades at 1.3467. The ADP Employment Change report for July showed a decrease from 98K to 44K, falling below the forecast of 70K. Education and health services added 36K positions, while leisure and hospitality shed 11K jobs, largely due to the recently concluded World Cup.

The ISM Services PMI in July remained in expansion territory, increasing slightly from 54 to 54.1, below the forecast of 54.5. The employment diffusion index fell from 51.2 to 47.4, while Prices Paid rose from 67.7 to 70.3, extending a trend lasting 110 months. Investors are now focusing on the Nonfarm Payrolls figures, scheduled for release on Friday.

Analysts expect the US economy to have added 80K jobs in July, up from June's 57K, with the unemployment rate anticipated to remain at 4.2%, unchanged from the previous month. Fed President Neel Kashkari suggested a gradual increase in interest rates, while Kansas City Fed official Jeffrey Schmid called for strict monetary policy to combat "too high" inflation.

Geopolitical factors, such as the easing of the US-Iran conflict and renewed talks, are supporting risk-sensitive currencies, like the Pound Sterling. In the UK, The Times reported that Treasury officials are exploring methods to raise billions of GBP within fiscal guidelines. GBP/USD maintains a bullish bias, currently trading above the clustered simple moving averages (SMA) at 1.3364, and has surpassed the prior descending trend-line break near 1.3443, now acting as support.

The daily Relative Strength Index (RSI) at approximately 57 remains in positive territory, indicating potential for further upside without overbought signals. On the upside, resistance can be found at the descending trend line from 1.3653, with a break level near 1.3525, preceding the former support trend-line break at around 1.3551.

Conversely, support is near the restored downtrend break at 1.3443, followed by the SMA cluster around 1.3364, and a deeper structural floor at the earlier rising trend-line break near 1.3312.