GBP/USD Forex Signal: Sterling Continues to Grind

The GBP/USD pair will likely continue rising as buyers target the next key level to watch will be at 1.2150.

Bullish View

  • Buy the GBP/USD pair and set a take-profit at 1.2150.
  • Add a stop-loss at 1.1990.
  • Timeline: 1-2 days.

Bearish View

  • Set a sell-stop at 1.2020 and a take-profit at 1.1950.
  • Add a stop-loss at 1.2125.

The GBP/USD exchange rate drifted upwards after the latest US jobs data that were published on Friday. It rose to a high of 1.2100, the highest point since January 2. It has rebounded by about 2.13% from the lowest point this year.

Stellar US Jobs Data

The GBP/USD pair rose after the US published stellar jobs numbers on Friday. According to the Bureau of Labor Statistics, the economy added over 225k jobs numbers in December. It has added over 4.2 million jobs in 2022, which is a sign that the economy was doing well.

Additional data published a day before reveled that the economy had over 10.2 million job vacancies. This happened even as some of the biggest American companies started mass layoffs as concerns of a recession rose. Amazon is slashing over 18,000 jobs while Meta Platforms laid off over 11,000 people in November.

The American unemployment rate dropped from 3.7% to 3.5% in December. Wage growth declined modestly, which is a signal that the actions by the Federal Reserve are working. Some of these actions have been rising interest rates and implementing quantitative tightening (QT) policies.

The GBP/USD price rose sharply as investors predicted that the Fed will be relatively dovish in the coming months. Besides, recent data also showed that the country’s inflation is easing as gas and oil prices retreat. Natural gas prices declined to the lowest level since 2021.

Meanwhile, American stocks soared, with the Dow Jones index adding over 700 points. In the same period, bond yields dropped sharply, which could complicate the actions of the Fed. The pair will next react to the upcoming statement by Jerome Powell, the Fed chair. He will likely provide signals of what the bank will do in the coming months.

GBP/USD Forecast

The GBP/USD pair rose sharply as the US dollar index declined after the latest jobs data. On the 4H chart, the pair moved to the standard pivot point. As it rose, it moved above the 25-day and 50-day moving averages. The Relative Strength Index (RSI) moved above the neutral point at 50.

It has moved above the important psychological level of 1.2000. Therefore, the pair will likely continue rising as buyers target the next key level to watch will be at 1.2150.

GBP/USD Signal

Ready to trade our free Forex signals? Here is our top 5 UK Forex brokers to check out.

Crispus Nyaga
Crispus Nyaga is a financial analyst, coach, and trader with more than 8 years in the industry. He has worked for leading companies like ATFX, easyMarkets, and OctaFx. Further, he has published widely in platforms like SeekingAlpha, Investing Cube,, and Invezz. In his free time, he likes watching golf and spending time with his wife and child.