Sterling held steady against the dollar on Thursday as US labour-market readings pointed to continued resilience ahead of Friday’s Nonfarm Payrolls. GBP/USD traded at 1.3466 after rebounding from an intraday low of 1.3404. Initial Jobless Claims for the week ending 1 August were 199K, above the prior week but below the 202K consensus, while Challenger planned job cuts fell 27% to 33.429K in July, the lowest since July 2024. Markets are now looking for payrolls of 80K versus June’s 57K, with the Unemployment Rate seen unchanged at 4.2%, below the Federal Reserve’s 4.5% projection for end-2026; inflation remains five years above its 2% goal.
Geopolitical risk remained in focus as a prospective Iran–Oman arrangement raised the prospect of reopening the Strait of Hormuz, although reports also pointed to restrictions on vessels linked to the US, Israel and other hostile countries. In the UK, S&P Global Construction PMI rose to 44.7 from 38.4. On charts, GBP/USD held above 1.3441 and the 50/100/200-day SMA cluster near 1.3365, with RSI at 56.7; resistance sits at 1.3523 and 1.3554, while support is flagged at 1.3316.
Trading Outlook and Technical Strategy
We recommend that derivative traders maintain a mildly bullish posture on GBP/USD as the pair holds above key technical support levels. The spot price of 1.3466 remains comfortable above the 50, 100, and 200-day moving averages clustered near 1.3365. With the Relative Strength Index sitting at a constructive 56.7, we should look to establish long positions or buy call options on short-term dips toward the 1.3440 level.
Event Risks and Volatility Management
We must prepare for heightened volatility in the coming days as the market reacts to the upcoming US Nonfarm Payrolls report. Economists expect payrolls to rise to 80K, up from the previous 57K, while the US unemployment rate is projected to hold steady at 4.2%. To trade this event safely, we can deploy options strategies like straddles to profit from sharp, sudden price movements regardless of the final direction.
Ongoing geopolitical friction in the Middle East, particularly regarding transit rules in the Strait of Hormuz, adds a layer of risk that could quickly strengthen the safe-haven US Dollar. Historically, energy supply disruptions cause sudden spikes in market volatility, which typically pressures risk-sensitive currencies like the Pound. We advise holding protective put options to safeguard our long sterling exposures against these sudden downside shocks.
On the UK side, economic resilience is starting to show as the S&P Global Construction PMI jumped to 44.7 from the previous low of 38.4. This improvement suggests the domestic economy is holding up better than expected, which should limit any deep sell-offs for the Pound. We should target upcoming resistance barriers at 1.3523 and 1.3554 using bull call spreads to maximize our returns while keeping our risk strictly defined.
