The GBP/USD price declined sharply ahead of the important US nonfarm payroll numbers. The pair fell to 1.3865, which is 2.50% below its highest level this year.
GBPUSD news: The pound sterling has been in the spotlight this week as investors focused on the annual budget reading by Rishi Sunak. We also received improving manufacturing and services PMI numbers. Most importantly, the pair reacted mildly to the latest ADP employment numbers from the United States.
The pair dropped yesterday after a statement by Jerome Powell, which also pushed the yields on government bonds higher. Today, focus will be on the UK house price index (HPI) data that will come out at 08:30 GMT. The numbers will be released by Halifax, a company that is owned by Lloyds.
The GBP/USD will also react to the latest US nonfarm payrolls (NFP) data that will come out in the afternoon session.
GBP/USD technical forecast
The GBP/USD pair has been under intense pressure lately. On the two-hour chart, we see that the pair has formed a head and shoulders pattern. It has also moved below the 25-period and 50-period moving averages.
Therefore, in my view, I suspect that the pair will break the neckline at 1.3857 and break-out lower in the near term. If this happens, the next level of support to watch will be 1.3800. On the flip side, this prediction will be invalidated if the price moves above the right shoulder at 1.400.