GBPUSD: SELL 1.3550, SL 1.3580, TP 1.3470 | 06 June 2025
06 June 2025, GBP/USD
An event to watch today:
15:30 EET. USD - Initial jobless claims
GBPUSD:
Despite a local recovery on Wednesday, the pound-dollar pair remains under pressure amid continued dominance of dollar flows. Investors continue to shift capital into dollar assets amid global uncertainty and anticipation of Friday's key US nonfarm payrolls (NFP) report. Even weak preliminary ADP data failed to radically change the mood — the market remains focused on the prospects for Fed monetary policy and the stability of the US economy.
There are no significant economic publications in the UK this week, and there are still several days to go before the employment data is released. This makes the pound vulnerable to external influences, especially when the US dollar is supported by global factors. In addition, uncertainty remains regarding the Bank of England's next moves, as signs of cooling economic activity and slowing inflation reduce the likelihood of further rate hikes.
ADP employment data for May was significantly below forecasts, but market participants traditionally treat this indicator with caution. Historically, ADP has shown a weak correlation with official NFP data, so investors remain hopeful for a strong report on Friday. At the same time, the negative surprise from the ISM Services PMI, which fell to an 11-month low, heightened fears of a slowdown in the US economy, but has not yet caused a change in direction for the pair — the dollar continues to attract demand as a safe-haven asset.
The pound sterling also remains under pressure due to lower expectations of tightening by the Bank of England. At the same time, despite weak macro data, investors still doubt that the Fed will move to aggressive rate cuts in the near future. Against this backdrop, the yield spread between US and UK bonds continues to work against the pound. In the absence of internal drivers and amid global volatility, the pound is prone to weakening, especially when testing key technical support levels.
Trading recommendation: SELL 1.3550, SL 1.3580, TP 1.3470
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