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GBP/USD looking to hang onto 1.3000 with US NFP in the barrel

  • The Pound is trading thinly atop Thursday's gains with US NFP looming in the upcoming session.
  • Broader markets have seen a decline in the USD across the table, and markets head into the week's end looking to continue a recovery in risk sentiment.
The GBP/USD is trading stiffly near the 1.3000 major handle after Thursday's rally on refreshed Brexit hopes, and the Cable heads into Friday's action ahead of another bumper US NFP showing.

The Sterling saw some much-needed lift yesterday after headlines broke that some progress may finally be being made on EU-UK Brexit negotiations; yesterday saw EU leaders in Brussels soothe financial markets with the announcement that European traders will maintain access to critical UK derivatives settling mechanisms in the event of a messy Brexit, but the headlines were good enough for Pound bulls to spark a brief rally. Pressure on the US Dollar in the broader fx marketscape helped to send the Greenback lower across the board, and the GBP/USD is enjoying a reprieve from normal selling.

Friday sees another reading of the US NFP report, dropping at 12:30 GMT and markets will be coiling ahead of the key jobs report, but before that will be the UK's Construction PMI for October (forecast 52.0, last 52.1), at 09:30 GMT. 

US Average Hourly Earnings are expected to increase to 3.1% for the year into October (last 2.8%), while NFP is expected to show 190 thousand new jobs compared to last month's reading of 134 thousand.

GBP/USD levels to watch

The Cable saw an incredible intraday extension on Thursday, and according to FXStreet's own Valeria Bednarik: "the pair added roughly 250 pips in the day and moved past multiple resistances, now supports without noticing. Now trading near 1.3000, the 4 hours chart shows that it's trying to stabilize above the 200 EMA, while the 20 SMA gains upward traction some 200 pips below the current level. Technical indicators are in extreme overbought levels, barely losing upward strength and with no signs of changing course. The pair has now an immediate resistance at 1.3043, October 23 daily high, with gains beyond it opening doors for an extension up to the 1.3100 figure."

Support levels: 1.2980 1.2935 1.2900  
Resistance levels: 1.3045 1.3090 1.3130