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05.08.202604:46 Forex Analysis & Reviews: GBP/USD Overview. August 5. Bright Times Ahead for the Pound

Relevancia 21:00 2026-08-05 UTC--4

Exchange Rates 05.08.2026 analysis

The GBP/USD currency pair traded quite calmly on Tuesday, and the only report of the day—the JOLTs report—did not generate much interest among traders. Typically, the first week of each month is the time for publishing the labor market and unemployment reports in the U.S. Generally, the market prepares for this for a long time, but in reality, in most cases, we only see movement on the day of the NonFarm Payrolls and unemployment publication, which will be on Friday. Likely, this will also be the case this time. The ISM, ADP, JOLTs reports, and others are certainly interesting, but the market will draw conclusions based on the NonFarm Payrolls reports and the unemployment rate.

Fortunately or unfortunately, everything now boils down to what results the labor market will show in July. As we have mentioned, the U.S. labor market is slowing down again, and the unemployment rate does not reflect the real state of affairs. Like any relative metric, it does not always accurately reflect the processes occurring in the economy. To illustrate, if 1 million retirees emigrate from the U.S. in a given month, the unemployment rate will decrease because the total number of workers remains the same, while the total population drops. However, this does not mean that American companies are hiring more employees. Additionally, each year more Americans earn their living through blogging or other informal professions, which are not included in the overall statistics. Thus, the unemployment rate is typically overshadowed by NonFarm Payrolls, which accurately shows the exact number of new jobs in the non-agricultural sector.

Well, as accurate as... almost accurate. It should be noted that, recently, nearly every NonFarm Payroll report has been revised. Over the past year and a half, they have usually been revised downward. If deviations were in the range of 5,000-10,000 jobs, they could be considered a margin of error. However, revisions can be as much as 50,000 jobs, so calling this figure precise is also difficult. It can only be used to track labor market dynamics, no more. As for forecasts, they are typically just "a shot in the dark." If the Bureau of Labor Statistics cannot accurately count how many new jobs were created during the reporting month, then what can be said about various experts who do not have access to official statistics?

Therefore, NonFarm Payrolls is the most important report on the labor market, but it is extremely imprecise. The deviation from the forecast can be vast. Thus, it is best to react to this report only after its publication. As for the prospects of the British pound, in our opinion, they are very positive. The market doubts that the Federal Reserve will raise the key rate even once by the end of the year; the Bank of England's last meeting ended more "hawkishly" than expected; and the geopolitical conflict in the Middle East is no longer a reason for capital flight to the safe-haven dollar. Moreover, the pound continues to move from the lower boundary of the sideways channel on the daily and weekly timeframes toward the upper boundary.

Exchange Rates 05.08.2026 analysis

The average volatility of the GBP/USD pair over the last 5 trading days stands at 94 pips. For the pound/dollar pair, this value is considered "average." On Wednesday, August 5, we expect the pair to move within a range bounded by levels 1.3350 and 1.3538. The upper linear regression channel is directed downward, indicating a bearish trend. The CCI indicator has entered the overbought area, which may provoke a new downward correction.

Closest support levels:

S1 – 1.3428

S2 – 1.3367

S3 – 1.3306

Closest resistance levels:

R1 – 1.3489

R2 – 1.3550

R3 – 1.3611

Trading Recommendations:

The GBP/USD currency pair maintains an upward trend. Donald Trump's policies will continue to pressure the U.S. economy, so we do not expect growth in the U.S. dollar in the long term. The year 2026 is proving super-positive for the dollar due to geopolitics, but every fairy tale comes to an end sooner or later. The weekly timeframe shows a flat range between 1.3150 and 1.3780 within a four-year upward trend, supporting expectations of continued growth in the British currency in the medium term. Long positions with targets of 1.3538 and 1.3550 can be considered when the price is above the moving average. When the price is below the moving average line, short trades targeting 1.3350 and 1.3306 can be pursued.

Explanations for the Illustrations:

  • Linear regression channels help determine the current trend. If both are directed in the same way, it indicates that the trend is currently strong;
  • The moving average line (settings 20,0, smoothed) determines the short-term trend and the direction in which trading should currently be conducted;
  • Murray levels are target levels for movements and corrections;
  • Volatility levels (red lines) indicate the probable price channel in which the pair will spend the next day based on current volatility readings;
  • The CCI indicator entering the oversold territory (below -250) or the overbought territory (above +250) indicates that a trend reversal in the opposite direction is approaching.

*El análisis de mercado publicado aquí tiene la finalidad de incrementar su conocimiento, más no darle instrucciones para realizar una operación.

Paolo Greco,
Analytical expert of InstaSpot
© 2007-2026
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