- GBP / USD is recovering from initial losses and is up 0.05% for the day.
- The drop in global yields is led by the decline in US Treasuries.
- The focus of GBP / USD traders is on the US inflation figures to be released on November 9.
The GBP/USD revives during the American session, after falling as low as 1.3411, trading at 1.3503, up 0.05% at the time of writing. The positive US non-farm payroll report initially hit the British pound, which lost 70 pips and fell towards daily lows. However, as investors scrutinize the US labor news, global bond yields plummet, led by US Treasury yields, with 10-year yields falling almost seven basis points to 1,462%, undermining the outlook for the US dollar.
On Wednesday, the US Bureau of Labor Statistics reported that October nonfarm payrolls rose 531,000 more than the 425,000 expected by analysts. In addition, the Unemployment Rate shows the resilience of the labor market, as it fell from 4.7% to 4.6%.
GBP / USD, which recovered after the Bank of England kept its interest rate unchanged (an unexpected move by at least 50% of analysts), continued its decline for the past two days. However, it appears that investors are reassessing current conditions as money markets are witnessing a global bond sell-off, which acted as a headwind for the dollar, as shown by the US dollar index dropping 0.09%, standing at 94.24.
Major macroeconomic events in the UK and the US next week
The UK economic calendar for November 6 will feature data such as retail sales. Then, on November 11, the Gross Domestic Product for the third quarter, followed by the Manufacturing and Industrial Production readings for September.
On the other hand, on November 8, the producer price index for October, followed by inflation figures from November 9 for the same period. Then on November 12, the University of Michigan Consumer Sentiment Index for November.
GBP / USD Price Forecast: Technical Outlook
On the daily chart, GBP / USD bounced away from 1.3411 and, at press time, is trading above Thursday’s close at 1.3497. Also, if it achieves a daily close of at least around 1.3500, it would form a hammer after a strong downtrend, meaning that solid buying pressure around the day’s lows pushed the British pound higher. However, the Relative Strength Index (RSI) is at 37, flat, which would prevent GBP / USD traders from opening new deals, given the possibility of higher prices.
Technical levels / Support and resistance levels
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