British Pound stalls as mixed US data keeps Fed hawkish bets alive

The Pound Sterling trades sideways versus the US Dollar on Tuesday after a tranche of US economic data was mixed, with business activity dipping in August, while a strong jobs market justified Fed Chair Warsh's hawkish tilt. The GBP/USD trades at 1.3540, down a modest 0.06%.

GBP/USD steadies as traders weigh US PMIs, jobs data and BoE risks

The ISM Manufacturing PMI in August was 54.6, down from 55.6 in July and missing forecasts of 55.2.  The Institute for Supply Management (ISM) revealed that new orders slowed while input prices remained high, a sign that may motivate the US central bank to raise rates.

At the same time, the Job Openings and Labour Turnover Survey (JOLTS) report for July revealed weak hiring, with vacancies increasing to 7.217 million, below forecasts of 7.3 million.

Recently, the labour market has been seen as solid, opening the door for further tightening by the Federal Reserve, which is battling inflation prints above the 2% target. Last Friday, Warsh said that the Fed still has “work to do” regarding price stability.

In the UK, BRC data show that retailers have raised prices the most since 2024, driven by higher energy, input, and commodity prices. Other data showed that the UK’s manufacturing activity expanded at its slowest rate since March.

Recently, Bank of England (BoE) Monetary Policy Committee (MPC) member Catherine Mann said that “interest rates should be a little bit too high and then of course correct if necessary.” She added that she has seen “somewhat stronger economic activity” since the last meeting to this one.

Money markets had priced in a 82% chance that the Bank of England would raise rates by the end of 2026, according to Prime Terminal.

Traders' eyes will be on the parliament's return this week as investors look for clues on how new Prime Minister Andy Burnham will fund his plans ahead of the October budget.

In the US, the docket will feature further jobs data, the ISM Services PMI and the Nonfarm Payroll figures on Friday, September 4.

GBP/USD Price Forecast: Technical Outlook

In the daily chart, GBP/USD trades at 1.3528, holding a constructive bullish bias as it remains above the cluster of simple moving averages (SMA) and broken trend-line levels that now act as support between roughly 1.3383 and 1.3481. The 50/100/200-period SMA pack, last near 1.3436, sits below spot and reinforces an underlying bid, while the Relative Strength Index (RSI) at 50.8 hovers around neutral territory, hinting at a consolidative tone rather than runaway momentum.

On the downside, immediate support is seen at the former downward trend-line break around 1.3481, followed by the triple SMA zone near 1.3436 and the secondary rising-line floor at 1.3413, with deeper structural support emerging at the earlier resistance break near 1.3383. On the topside, the next significant hurdle is the rising support trend-line’s break level around 1.3647, where a clear daily close above would open the way for a more decisive continuation of the broader GBP/USD uptrend.