GBP/USD Rebounds—Will the NFP Report Torpedo the Recovery?

Sterling claws back losses against the dollar—but Friday’s jobs data could flip the script.

Key levels to watch: 1.2600 holds as support, resistance looms at 1.2750. Break either side and we’re off to the races.

Nonfarm Payrolls incoming: Another ’goldilocks’ print would make traders swoon—but since when does the market get what it wants?

U.S. Jobs and Trade Sentiment to Move Dollar

The dollar has found some support as U.S.-China trade talks show signs of life. After weeks of tariff escalation, Beijing has indicated they are willing to talk again, which has given risk appetite and dollar a bit of a boost.

But all eyes now are on the April U.S. Non-Farm Payrolls (NFP) report. Markets are expecting a slowdown:

• NFP: 138,000 forecast vs 228,000 prior

• Unemployment: Expected to remain at 4.2%

• Wage growth: Seen rising 0.3% month-over-month

A weaker print could see the Fed cut rates and weigh on the dollar – giving GBP/USD room to rally.

BoE Rate Cut Expectations Cap Sterling Gains

The BoE is under pressure to cut. Governor Andrew Bailey said global trade tensions could spill into the UK economy and markets are pricing in a 96% chance of a 25 basis point cut to 4.25% at the May 8 meeting according to a Reuters poll.

This dovish bias may limit sterling gains unless NEAR term data surprises to the upside or global sentiment turns risk-on.

Trade Setup Summary – GBP/USD

• Entry: Buy on break above $1.3331

• Targets: $1.3352 and $1.3374

• Stop-Loss: Below $1.3260

Newbie? Buy on confirmation.