GBP/USD rallies 0.8% as weak US jobs data hammers dollar

GBP/USD surged 0.8% to 1.2680 following Friday's disappointing US Non-Farm Payrolls report, which showed only 125,000 jobs added versus expectations of 185,000. The unemployment rate unexpectedly rose to 4.1% from 3.9%, marking the highest level since January 2022. This dramatic miss has increased speculation that the Federal Reserve may pause its tightening cycle, with markets now pricing a 65% chance of no rate hike at the September meeting. The pound found additional support from better-than-expected UK services PMI data at 53.7. Technical momentum remains bullish, with GBP/USD breaking above the 1.2650 resistance level and eyeing 1.2720 (June high) as the next target. Support has formed at 1.2600 (previous resistance turned support). The significant NFP miss could mark a turning point for dollar strength, potentially benefiting sterling if UK economic data continues to show resilience.