• GBP/USD has scaled above the immediate hurdle of 1.1700 firmly.
• As the US economy is operating at full employment level, a decline in US NFP is admissible.
• A decline in US earnings data may dent the market sentiment.

The GBP/USD pair has delivered an upside break of the consolidation formed in a narrow range of 1.1687-1.1697 and is aiming to sustain above the immediate hurdle of 1.1700. The cable has turned sideways after a meaningful pullback move from Monday’s low at 1.1650. The asset is expected to continue its doldrums as investors are getting sidelined ahead of the US Nonfarm Payrolls (NFP), which will release on Friday.

As per the market consensus, the US economy generated 290k fresh jobs in August against the prior release of 528k. It is worth noting that the US employment data has not disappointed yet to Fed Policymakers, even this time, the NFP could continue its upbeat cycle. Also, investors should not consider the decline in job creation as a major issue. The US economy is operating at full-employment levels for around six months; therefore, more room for job creation has been trimmed significantly.

Apart from that, investors will also focus on the Average Hourly Earnings, which is likely to shift higher by 10 basis points (bps) at 5.3%. As price pressures are advancing dramatically, earnings have remained subdued. Therefore, households are facing headwinds amid higher payouts for inflation-adjusted goods and services. Sub-par growth in households’ earnings in order to offset the higher payouts may dent the sentiment of market participants.

On the UK front, soaring electricity and energy prices are creating havoc for the Bank of England policymakers. The UK economy is tackling multiple headwinds such as political instability after UK PM Boris Johnson's resignation, the energy supply crisis, and higher projections for the inflation rate.