British Pound edges higher above 1.3500 ahead of US jobs report

The British Pound edged higher against the US Dollar ahead of the US jobs report on Friday. This movement was influenced by hawkish remarks made by Bank of England (BoE) policymaker Huw Pill. Pill suggested that raising interest rates now could reduce the need for more aggressive rate hikes in the future to control inflation, which has increased due to the Iran war.

While traders priced the probability of a 25 basis points (bps) rate hike at the next BoE meeting at less than 15%, this chance increased to over 70% for the November meeting. The upcoming US employment report for August, which showed a projected increase in Nonfarm Payrolls (NFP) of 56,000 and a stable Unemployment Rate of 4.1%, will be closely monitored.

Analysts expect that this report may provide hints about the US interest rate outlook. The Pound has been trading above the 100-day Simple Moving Average and the lower Bollinger Band, maintaining a mildly bullish bias. The Relative Strength Index (RSI) around 52 suggests a slightly positive outlook, although price stalled just below the Bollinger mid-line, indicating near-term congestion.

The immediate resistance is at the Bollinger middle band around 1.3555, with the next hurdle at 1.3660 if buying pressure continues. The downside support is at the lower Bollinger Band around 1.3450, followed by the 100-day SMA at 1.3445. This technical analysis was assisted by an AI tool.