- GBP/USD gains ground to near 1.3360 in Friday’s early European session.
- The major pair remains capped below the key 100-day MA.
- The first upside barrier emerges at 1.3410; the initial support level is seen at 1.3300.
The GBP/USD pair trades in positive territory around 1.3360 during the early European session on Friday. The British Pound (GBP) gathers strength against the US Dollar (USD) on a weaker-than-expected US Nonfarm Payrolls (NFP) report.
Signs of a cooling US labor market have prompted financial markets to dial back expectations for a near-term interest rate hike from the US Federal Reserve (Fed), weighing on the Greenback and creating a tailwind for the major pair. Financial markets are now pricing in nearly a 52% chance of a US rate hike by September, down from 66% before the jobs data, according to the CME FedWatch tool.
Traders will closely watch the developments surrounding UK politics since Keir Starmer stepped down last week. Natixis analysts said while Andy Burnham’s commitment to fiscal discipline offers near-term support, markets will closely monitor future budgets for any signs that fiscal rules are being relaxed to finance higher public spending.
Technical Analysis:
In the daily chart, GBP/USD sits above the Bollinger middle band, keeping a modestly supported tone, while it remains capped by the 100-day simple moving average (SMA). The Relative Strength Index (RSI) at about 54 suggests mildly positive but not overextended momentum.
On the topside, initial resistance is located at the 100-day SMA near 1.3410, and a daily close above this barrier would open the door toward the upper Bollinger band around 1.3468. On the downside, immediate support aligns with the Bollinger middle band at 1.3300, ahead of the lower band near 1.3132, where a deeper pullback could attract dip-buying interest within the broader range.
