Despite recent challenges, sterling continues to show resilience against the U.S. dollar, holding firm near the 1.35 level. This robust performance comes as traders navigate a complex landscape of geopolitical uncertainty and upcoming economic data, particularly Friday's U.S. payrolls report.

Cable remains relatively well-bid, with support in the low 1.34s holding for now as markets await geopolitical news — most notably a possible Hormuz deal — which could have downstream effects on oil prices and global inflation expectations. Thursday's U.S. initial jobless claims data had a muted impact on FX and fixed income markets, suggesting the payroll figures may not immediately clarify the inflation outlook for the second half of 2026. With summer liquidity remaining light, GBP/USD traders are likely to shift their focus quickly to the U.S. and UK consumer price index reports scheduled for release on August 12 and August 19, respectively. However, similar liquidity and data-related constraints could also limit the market's reaction to those releases, potentially keeping GBP/USD anchored near current levels.

From a technical perspective, GBP/USD finds support at 1.3418, the August 3 low, and 1.3403, the flat 200-DMA. A close below 1.3400 big-figure support is likely to have bears target the July 28 low at 1.3276. On the upside, bulls need a close above the August 3 high at 1.3505 and the July 15 high at 1.3556 to add to momentum and rally toward early-May highs near 1.3650.
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(Paul Spirgel is a Reuters market analyst. The views expressed are his own)