1.3400 breached: British Pound slides as blowout US NFP reignite Fed hike bets

Nearly 0.60% lower, GBP/USD hits 1.3371 after breaching 1.3400.
165K US payroll gain beats the 65K forecast as unemployment drops to 4.1%.
Despite the prospect of further rate rises, BoE tightening offers Sterling no support.

GBP/USD has fallen nearly 0.60%. Sterling is trading at 1.3371 against the US Dollar, down from a peak near 1.3463. A strong US Nonfarm Payrolls report points to a resilient labour market, paving the way for further tightening by the Federal Reserve (Fed).

165K NFP gain drives GBP/USD lower as Fed tightening bets strengthen

TMGM Analysis: Financial Market News, Economic Calendar & Market Insights

October US Nonfarm Payrolls rose by 165K, well above the 65K forecast. September's gain was revised up to 60K from 29K. With employers recruiting across sectors, the report showed the Unemployment Rate falling to 4.1%.

The University of Michigan's latest survey put November Consumer Sentiment at 51, beating forecasts and the previous month's reading of 48. Americans also anticipate slightly lower inflation. One-year inflation expectations eased to 4.3% from 4.7%, while five-year expectations slipped to 3.4% from 3.5%.

Following the releases, the CME FedWatch Tool showed investors pricing in a nearly 77% chance of a December Fed rate rise, up from 67% a day earlier.

On the geopolitical front, Al-Arabiya cited an Iranian source as saying Tehran was responding positively to the latest proposal from mediators. Tensions nevertheless remain elevated. Tasnim reported unconfirmed accounts that a US aircraft had issued an emergency notice near Oman's coast.

According to St. Louis Federal Reserve (Fed) President Alberto Musalem, “people remain concerned about inflation at the current level,” although inflation expectations remain anchored. He attributed the current excess inflation to energy shocks and the AI buildout.

In the UK, GBP/USD initially benefited from the Bank of England (BoE) rate rise. However, the inability to break decisively above 1.3500 intensified Sterling's slide below 1.3400 during Friday's trading.

Cable sellers still face risks. The BoE signalled that another rate increase could follow, despite seeing no clear evidence of second-round inflation effects. The central bank also said a potential US-Iran peace deal would benefit the economy, while cautioning that it might not be enough to lower inflation.

UK GDP data and speeches from BoE officials could unsettle markets next week. On the US side, CPI releases, jobless claims and comments from Fed officials could shape GBP/USD's direction.

1.3362 support in focus: GBP/USD technical price outlook

Chart Analysis GBP/USD — GBP/USD: daily price chart

At 1.3368 on the daily chart, GBP/USD remains just above immediate support around 1.3362, where the 50/100/200-day simple moving averages (SMA) converge. The pair is trading slightly below the descending resistance trend line break at 1.3381. Its movement around these key averages leaves the near-term outlook neutral. A Relative Strength Index (14) reading of 50.77 likewise suggests consolidation rather than a directional move.

The first upside hurdle is the downward-sloping trend line break at 1.3381. Beyond that, former rising support trend lines provide resistance at their break prices of 1.3684 and 1.3855. On a decline, the three-SMA cluster near 1.3362 offers immediate support. Further below, the prior resistance trend line break around 1.3235 forms a structural floor, where buyers would be expected to return should the pullback extend.

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

Pound Sterling: Today's Price Moves

Today's percentage moves in the British Pound (GBP) against the major currencies listed are shown below. Sterling recorded its strongest performance against the New Zealand Dollar.

	USD	EUR	GBP	JPY	CAD	AUD	NZD	CHF
USD		0.62%	0.64%	0.30%	0.69%	0.83%	0.93%	0.41%
EUR	-0.62%		0.02%	-0.32%	0.10%	0.19%	0.29%	-0.21%
GBP	-0.64%	-0.02%		-0.32%	0.06%	0.18%	0.25%	-0.23%
JPY	-0.30%	0.32%	0.32%		0.39%	0.52%	0.61%	0.10%
CAD	-0.69%	-0.10%	-0.06%	-0.39%		0.13%	0.22%	-0.29%
AUD	-0.83%	-0.19%	-0.18%	-0.52%	-0.13%		0.10%	-0.41%
NZD	-0.93%	-0.29%	-0.25%	-0.61%	-0.22%	-0.10%		-0.50%
CHF	-0.41%	0.21%	0.23%	-0.10%	0.29%	0.41%	0.50%

Percentage movements between major currencies are displayed in the heat map. Select the base currency in the left-hand column and the quote currency in the top row. For instance, choosing the British Pound on the left and following its row across to the US Dollar gives the percentage change for GBP (base)/USD (quote).