British Pound stays flat near mid-1.3400s as USD softens; will US NFP provide fresh direction?

• GBP/USD finds support from a weaker USD, halting the previous day’s pullback from highs last seen in mid-September.
• USD buyers remain under pressure as US bond yields retreat sharply and hopes rise for diplomacy over Iran.
• GBP gains additional support from the BoE’s hawkish stance ahead of the key US NFP release.

Dip-buying lends support to GBP/USD in Friday’s Asian session, interrupting the previous day’s decline from just above the psychological 1.3500 level, its highest since mid-September. With the crucial US monthly jobs report due, however, traders appear reluctant to take aggressive positions. The pair is currently quoted just above 1.3450, a modest gain of 0.05% on the day.

Pressure on the safe-haven US Dollar (USD) is providing some support to GBP/USD ahead of the major data release, as US bond yields have fallen sharply and hopes persist for diplomacy over Iran. The US Nonfarm Payrolls (NFP) report will be central to shaping expectations for the US Federal Reserve’s (Fed) December move. Those expectations will, in turn, influence USD demand and give the pair fresh direction.

Expectations of political gridlock increased following the Democrats’ sweeping US midterm election victory, raising the possibility of constraints on government spending and slower economic growth. Adding to the backdrop, top Senate Democrat Chuck Schumer pledged on Wednesday to press for an end to the Iran war, prompting crude oil prices to drop by over 10% over the week. The resulting easing of inflation concerns has pushed US bond yields to a near two-month low, limiting the safe-haven USD’s upside.

For the British Pound (GBP), support comes from the Bank of England’s (BoE) turn towards a hawkish stance. The central bank raised interest rates for the first time in more than three years and indicated that another increase is likely unless the US-Iran war is resolved. Meanwhile, Chancellor John Healey’s 2026 Autumn Budget lowered the immediate risk of a runaway fiscal crisis. This is viewed as an additional supportive factor for GBP and GBP/USD.

Even so, the pair remains on course to post gains for a fourth successive week. Given the favourable fundamental backdrop, any corrective decline could attract buying interest and is more likely to prove short-lived.

What does the GBP/USD daily chart show?

Can GBP/USD Clear Its Next Technical Hurdle?

A positive near-term bias remains in place while GBP/USD trades above key Fibonacci support levels and the 200-day Simple Moving Average (SMA) at 1.3421. As the recovery from the 1.3138 cycle low continues, the pair is testing a closely packed retracement zone. Immediate gains are being capped by the 61.8% Fibo. level at 1.3470, the next obstacle for buyers.

If the pair decisively clears the 61.8% Fibo. retracement, the 78.6% level at 1.3560 would come into view, followed by the August swing high of 1.3674. A more substantial supply zone could develop around that high. Should prices decline, the first support lies at the 200-day SMA of 1.3421, with the 50.0% level at 1.3406 next in line. A steeper correction would likely bring the 38.2% retracement at 1.3343 into focus.

(The technical analysis of this story was written with the help of an AI tool. Know more.)