GBP/USD – JOLTS data pulls US yields lower but Fed will hope for more this week

• JOLTS job openings slip to 8.827m (9.465m expected, 9.165m previously)
• Consumer confidence also falls but the survey is volatile
• Is last week’s breakout stalling?

As we near the end of the summer, activity will start to pick up again and that may begin this week in the build-up to Friday’s jobs report.

With Jackson Hole behind us, and not really living up to the usual hype, the focus now switches to the September central bank meetings and the key data releases that could sway them one way or another as policymakers ask themselves whether they’ve already done enough.

From the Fed’s perspective, the week is off to a promising start with the JOLTS job opening report much softer than expected, alongside downward revisions to the previous month. The Fed needs to see a softer labor market to be confident that price pressures aren’t just abating but substantially and sustainably and this report is a move in the right direction.

Job openings are now back at levels last seen in the summer of 2021 and not too far from where they were pre-pandemic. Further softness over the next few months looks very plausible which could contribute to a cooler labor market and sustainably lower wage growth.

The CB consumer confidence number also suggests households are still wary, although the survey can be quite volatile and correlated with factors such as stock markets and gas prices, as we’ve seen the last couple of months alone.

Breakout to gather pace?

Cable had been threatening to break lower throughout August and it finally happened at the end of last week, with the price moving below 1.26 and closing below the 55/89-day simple moving average band.

GBPUSD Daily

Source – OANDA on Trading View

That could be viewed as a very bearish moving coming soon after a brief 38.2% retracement – July highs to early and mid-August lows – and a repeated test of that support.

While it has consolidated a little higher since, that US data did briefly push it lower once more although it has since pared those moves.

What’s interesting is the momentum indicators at the bottom as while the pair hasn’t accelerated lower following the breakout in a significant way, the MACD and stochastic look fairly healthy.

There’s a lot of economic data this week though from the US that could sway this one way or another.

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