Sterling's rebound following unexpectedly strong U.S. non-farm payrolls data on Friday could provide a short-lived selling opportunity for bears -ahead of next next week's anticipated 25bp BoE rate cut. Sterling struck a low of 1.3265 following the jobs report, but then bounced up to 1.3330. Cable's April rally from just above 1.27 to 1.3445 was driven by broad dollar weakness amid U.S. trade policy uncertainty. Easing trade tensions have allowed the dollar to regain ground from its 2025 lows, cutting into sterling’s earlier gains. China’s willingness to consider a U.S. offer to hold trade talks might lead to further reversal of the early April dollar sell-off, while the pound could lose some yield appeal if -- as markets widely expect -- the Fed holds rates steady on May 7 and the BoE rate cuts the following day. However, if global trade tensions indeed become more manageable, sterling's weakness could be transitory as U.S. and UK rates are expected to converge around 3.6% by year-end 2025, giving neither currency a yield advantage. While below the 10-DMA at 1.3339 bears appear to have the upper hand and GBP/USD is likely to find support by the rising 21-DMA at 1.3187. A dip below 1.3079, the 50% Fib of 1.2712-1.3445, would add to the bearish structure, putting the daily cloud top at 1.2865 and the April low at 1.2712 in focus. For more click on <^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^ GBP Chart: https://fingfx.thomsonreuters.com/gfx/buzz/egvblwoyevq/gbp%20comm%205-2.jpg ^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^> (Paul Spirgel is a Reuters market analyst. The views expressed are his own) ((paul.spirgel@thomsonreuters.com))
