The GBP to USD exchange rate has been trading above 1.25 since November, but the decline last week brought GBP/USD below that level and now this pair is facing the 100 weekly SMA. The price was bouncing within a range of three cents, between 1.25 and 1.28. In early March, buyers managed to push the price close to 1.29, but the momentum lacked follow-through, leading to a subsequent decline in the currency pair.

GBP/USD Chart Weekly – Will the 100 SMA Turn Into Support?

This retreat caused the GBP/USD pair to fall back to the 50-weekly Simple Moving Average (yellow) initially, which held the price above 1.25 for two weeks. But last week sellers returned and they managed to push below the 50 SMA, reaching the 100 SMA (green). The 100-weekly SMA is often viewed as a significant long-term trend indicator, and its role as a support level suggests strong market interest or sentiment at that price level.

The dollar remains robust at the moment, with the DXY index climbing above 106 points, bolstered by a less-dovish FED. The likelihood of the Federal Reserve reducing interest rates in June has diminished further, with odds dropping below 40% of previous forecasts. Yesterday, GBP/USD experienced a modest increase during the Asian session but reversed course lower during the US session, declining to the 1.2520s. On the downside, this currency pair faces initial support around 1.2370, followed by stronger levels at 1.23 and 1.22, which could help stabilize any downward movement.

UK March Employment and Earnings Report

• UK February ILO unemployment rate 4.2% vs 4.0% expected

• January ILO unemployment rate 3.9%

• Employment change -156k vs 58k expected
• Prior employment change -21k
• Average weekly earnings +5.6% vs +5.5% 3m/y expected
• Prior Average weekly earnings  +5.6%
• Average weekly earnings (ex bonus) +6.0% vs +5.8% 3m/y expected
• Prior Average weekly earnings (ex bonus) +6.1%
• March payrolls change -67k
• Prior payrolls were 20k; revised to -18k