British Pound climbs to 1.3400 as UK jobs data exceed expectations and hopes of Iran deal rise

• Accelerating Dollar selling lifts GBP/USD 0.70% towards 1.3400.
• UK job creation reaches 102K, far exceeding the 5.1K forecast.
• Sentiment improves on reports of a US-Iran agreement; odds of a November BoE rate rise hit 93%.

Solid UK labour market figures have helped lift the Pound Sterling by about 0.70%, alongside news from Israel’s Channel 12 News suggesting that the US and Iran appear to have reached an agreement. Having rebounded from its daily low of 1.3300, GBP/USD is trading close to 1.3400.

Strong UK employment and reported US-Iran diplomatic progress lift Sterling as the Dollar weakens

A proposal put to senior Iranian officials by the Pakistani army chief has already secured US approval and preliminary agreement from Tehran, Israel’s Channel 12 News reported.

Under the proposal, Qatar would unfreeze and transfer $6 billion US Dollars to Iran, according to Israel’s Channel 12 News. Tehran would agree to a secret visit to its nuclear facilities by the International Atomic Energy Agency, with no public announcement of the visit.

Following the reports, the US Dollar Index (DXY), which measures the Greenback against six currencies, slipped 0.32% to 101.66.

Separately, September US Pending Home Sales fell 7.3% to a record low, compared with forecasts of -0.5%. Commenting on the figures, the NAR's chief economist Lawrence Yun said, “Market conditions weakened in September due to fast-rising mortgage rates.”

September saw the UK workforce expand by 102K, well above the 5.1K forecast and the 67K jobs added in August. The Unemployment Rate consequently declined, while Average Earnings Including Bonus eased in the three months to August.

According to Prime Terminal, money markets had priced in a 93% probability of a Bank of England interest rate rise at its November meeting.

September inflation and Retail Sales figures are next on the UK economic calendar. There are no US releases scheduled for 21 October, but activity picks up on 22 October with Initial Jobless Claims for the week ending 17 October.

GBP/USD Price Forecast: Recovery faces overhead technical resistance

Trading at 1.3375 on the daily chart, GBP/USD remains mildly bearish below the cluster of 50-, 100- and 200-day simple moving averages (SMA) around 1.3411 and descending trend-line resistance near 1.3407. Momentum is showing signs of improvement, with the Relative Strength Index (14) rising into positive territory at 56.3. Nevertheless, these overhead technical barriers continue to cap the price, suggesting that the rebound remains corrective against a broader backdrop of consolidation with a downside bias.

The descending trend line around 1.3407 provides the first resistance, immediately ahead of the three-SMA barrier near 1.3411. A decisive daily close above that barrier would clear the way towards 1.3616 and 1.3801, where former rising support lines now act as resistance. Initial support lies near 1.3273, the level of the earlier downtrend break. A fall back below this pivot would leave the recent advance vulnerable to a deeper retracement and restore bearish pressure on the pair.

(The technical analysis of this story was written with the help of an AI tool. Know more.)