Might 1.3500 prove a key hurdle for GBP/USD on US NFP day?

• The British Pound's pullback against the US Dollar deepens, taking it towards 1.3425.
• September's US NFP report remains firmly in focus for investors.
• Thursday's BoE decision lifted interest rates to 4%, an increase of 25 bps.

Selling pressure on the British Pound (GBP) persists in Friday's European session, with GBP/USD retreating towards 1.3425 from an almost eight-week high of 1.3500. A recovery in the US Dollar (USD) is weighing on the pair ahead of the United States (US) Nonfarm Payrolls (NFP) report for October, due at 13:30 GMT.

A gain of 0.2% puts the US Dollar Index (DXY) near 101.77 at the time of writing. The index measures the Greenback against a basket of six major currencies.

With the labour market report approaching, MUFG/BTMU analysts observe that “attention turns to today’s US nonfarm payrolls report, with markets expecting 70k jobs added in October, up from 29k in September.” In their assessment, “stronger-than-expected JOLTS and ADP data suggest a better-than-expected US labour demand, raising the risk of further Fed tightening”.

Expectations for the Federal Reserve's (Fed) interest rate path are likely to be shaped by the US NFP release.

For Sterling, Thursday brought the Bank of England's (BoE) first interest rate increase in 2026: a 25 basis point (bps) rise that took the rate to 4%. The move had been anticipated as the BoE sought to curb accelerating inflationary pressures.

GBP/USD Technical Analysis: Can the Pair Sustain Its Positive Bias?

Buyers appear to be defending higher levels on the daily chart, where GBP/USD is trading at 1.3425. A positive short-term bias remains intact while the pair stays above both the 20-period Exponential Moving Average (EMA) at 1.3372 and the 50% Fibonacci retracement of the latest decline at 1.3409. At 57, the Relative Strength Index (14) also points to continuing upward momentum without reaching overbought territory.

The 61.8% Fibonacci retracement near 1.3472 marks the first resistance on an advance. Beyond it, the 78.6% retracement around 1.3562 and the recent cycle high zone near 1.3677 present further hurdles. A decline would first encounter support at the 50% retracement of 1.3409, then the 20-EMA at 1.3372. Should the pullback deepen, the 38.2% level at 1.3345 and the 23.6% retracement near 1.3267 would come into view, before the stronger demand zone around the cycle low of 1.3140.

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