July 3, 2025 – Written by Tim Boyer

STORY LINK Pound-to-Dollar Forecast: GBP Steady despite Strong US Jobs Data

The Pound US Dollar exchange rate trended mostly flat on Thursday as the US released its latest non-farm payrolls index and unemployment rate.

At the time of writing, GBP/USD was trading at approximately $1.3658, down roughly 0.3% from the start of Thursday’s session.

The US Dollar (USD) strengthened on Thursday, buoyed by unexpectedly upbeat labour market data that helped reinforce confidence in the resilience of the US economy.

June’s non-farm payrolls figure exceeded expectations, climbing to 147,000 new jobs versus forecasts of a sharp drop to 110,000, up from May’s revised reading of 144,000.

Adding further support, the US unemployment rate defied predictions of a rise to 4.3%, instead dipping to 4.1% from 4.2%.

The combination of stronger-than-expected job creation and a lower jobless rate provided a boost to the US Dollar during Thursday’s European session, as investors took the data as a sign that the labour market remains on solid footing.

The Pound (GBP) regained some composure on Thursday, stabilising after a volatile mid-week session, marked by political tensions in Westminster.

Sterling had come under pressure on Wednesday amid speculation surrounding Chancellor Rachel Reeves’ standing within the Labour government.

Market nerves were heightened after Prime Minister Keir Starmer refrained from offering a clear endorsement during Prime Minister’s Questions, sparking a sell-off in UK bonds and dragging GBP lower.

However, investor sentiment improved on Thursday following renewed backing for Reeves from Starmer, helping to calm concerns.

As gilt yields eased from their recent spike, the Pound found renewed support and edged higher against several of its counterparts on Thursday.

Looking ahead to Friday’s European session, the GBP/USD exchange rate is likely to remain range-bound, with limited data and subdued trading conditions offering little direction.

With no major UK economic releases scheduled and US markets closed for the Independence Day holiday, both the Pound and the US Dollar may struggle to find meaningful momentum.

In the absence of fresh catalysts, market sentiment will likely take centre stage.

However, with thin trading volumes expected, volatility may be muted. As a result, the GBP/USD exchange rate is likely to fluctuate within a narrow band as the week comes to a close.

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USD/JPY Technical Analysis

The US dollar has skyrocketed against the Japanese yen, breaking above the 145 yen level almost immediately, and now we are threatening that 50 day EMA. Ultimately, I do think this is a situation where traders will eventually try to push this market back to the upside anyways, because quite frankly, the Bank of Japan has a major issue on its hands in the form of a lackluster bond market. They will sooner or later be forced to do a bit of quantitative easing. When they do, the Japanese yen will sink. This is one of the few places that I expect a complete turnaround in the US dollar. So, I like buying dips. I think we will go higher.

AUD/USD Technical Analysis

And yet again, we find ourselves near the 0.6550 level in the Australian dollar. The market broke down below that level for a brief moment, only to turn around and bounce a bit. So, it’ll be interesting to see how this plays out, but I do think you have a situation where traders are going to continue to look at this as a magnet for price. If it can hold for support, then that’s a good sign for the Australian dollar. It could send the Aussie dollar as high as 0.67, we’ll just have to wait and see.

The move higher has been in an extreme grind more than anything else. So, if you’re a short term kind of scalper type of trade aficionado, then you’ll love the Aussie. Clearly, it’s a buy on the dip market, but as far as momentum to the upside, it’s very slow trading indeed.

For a look at all of today’s economic events, check out our economic calendar.

• Political jitters in the UK weighed heavily on Pound Sterling on Wednesday.
• The near-term technical outlook highlights a lack of bullish momentum.
• The US economic calendar will feature Nonfarm Payrolls data for June.

GBP/USD came under heavy bearish pressure on Wednesday and lost about 0.8%. The pair stages a rebound early Thursday but trades well below 1.3700. Markets will keep a close eye on political developments in the UK and scrutinize the June employment report from the US.

British Prime Minister Keir Starmer’s refusal to guarantee that finance minister Rachel Reeves will remain in her position until the next election triggered a selloff in UK government bonds during the European session on Wednesday, causing Pound Sterling to weaken against its major rivals.

Late Wednesday, Starmer said that Reeves would remain chancellor “for a very long time to come,” easing concerns over a political turmoil. In response, the 10-year UK gilt yield started to correct lower early Thursday after rising nearly 4% on Wednesday and helped GBP/USD find support.

Later in the day, the US Bureau of Labor Statistics is forecast to report an increase of 110,000 in Nonfarm Payrolls (NFP) in June.

According to the CME Group FedWatch Tool, markets are currently pricing in about a 25% probability of the Federal Reserve (Fed) cutting the policy rate by 25 basis points in July. Hence, a positive surprise in NFP, with a print above 150,0000, could confirm a Fed policy-hold in July and help USD gather strength ahead of the July 4 holiday. Conversely, a disappointing reading below 80,000 could hurt the USD with the immediate reaction and open the door for an extended recovery in GBP/USD.

GBP/USD Technical Analysis

GBP/USD stays slightly below the 50-period Simple Moving Average (SMA) and the Relative Strength Index (RSI) indicator remains below 50, reflecting a lack of bullish momentum.

On the downside, 1.3620 (static level) aligns as the next support level before 1.3590 (100-period SMA) and 1.3550 (200-period SMA). Looking north, resistance levels could be spotted at 1.3690-1.3700 (mid-point of the ascending channel, static level), 1.3770 (static level) and 1.3800 (static level, round level).

• The USD/JPY forecast shows a rebound as the dollar gains on trade optimism.

• The US economy lost 33,000 private jobs in June.

• Economists expect 120,000 new US jobs, a slowdown from the previous month.

The USD/JPY forecast shows a rebound as the dollar gains on trade optimism. However, downbeat employment figures in the previous session led to an increase in Fed rate cut expectations. Market participants are now looking forward to the nonfarm payrolls report. 

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The dollar strengthened on Thursday after news of a trade deal between the US and Vietnam. The news raised hopes of more deals before the July 9 deadline for reciprocal tariffs. The progress in trade talks has been slow, and there are concerns that tariffs will increase again soon. Therefore, any new deal boosts market sentiment. 

However, the dollar remains under pressure after data in the previous session revealed weak private employment. The economy lost 33,000 private jobs in June. Meanwhile, economists had expected 99,000 new jobs. The report raised concerns about the state of the labor market. At the same time, it increased the likelihood of a Fed rate cut in July. 

All eyes are now on the nonfarm payrolls. Economists expect 120,000 new jobs, a slowdown from the previous month. Moreover, unemployment might increase from 4.2% to 4.3%. Softer-than-expected figures will weigh on the dollar by adding pressure on the Fed to lower borrowing costs.

USD/JPY key events today

• US average hourly earnings m/m
• US nonfarm employment change
• US unemployment rate
• US ISM services PMI

USD/JPY technical forecast: Price retests trendline after recent break

On the technical side, the USD/JPY price has broken below its bullish trendline to make a lower low. The move has strengthened the bearish bias. However, the price has pulled back to retest the recently broken trendline and the 30-SMA. However, the price remains below the SMA, with the RSI under 50, indicating that bears are still in the lead. However, this might change. 

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The current resistance zone must hold firm to allow the price to bounce lower and confirm the breakout. If this happens, the USD/JPY pair will likely drop to retest the 142.55 support level. 

On the other hand, if bulls are stronger, the price will likely break above the resistance zone. Still, to confirm a new bullish move, the price would need to break above the 145.00 resistance level. 

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