GBP/USD Tests Key Support Level as Headwinds Increase

The GBP/USD pair rebounded to around 1.3100s after dipping during the Asian session on Monday, but several factors might hinder further gains. The recent US employment report indicated a labor market momentum slower than expected, raising concerns about the US economy's health. This has dampened investors' risk appetite, benefiting the US Dollar (USD) and creating volatility for GBP/USD. Additionally, a survey of recruiters showed a notable cooling in the UK's labor market last month, with a sharp decline in job placements and slower pay growth. This supports the case for potential interest rate cuts by the Bank of England (BoE), which may deter aggressive bets on the British Pound (GBP) and cap GBP/USD gains. Investors are now awaiting the UK monthly jobs data scheduled for Tuesday. In the meantime, USD price movements will remain a key factor influencing the GBP/USD pair, given the lack of significant economic data from the UK or US on Monday.

For GBP/USD, the initial support lies at 1.3080, followed by 1.3040 and 1.3000 below. On the upside, the first resistance is at 1.3140, with subsequent levels at 1.3190 and 1.3250 if the pair breaks above this resistance.