The GBP/USD currency pair is trading 0.25% higher, nearing the 1.3590 mark during the European trading session on Friday. The British Pound (GBP) is showing notable strength, outperforming its major counterparts—excluding the Australian and New Zealand dollars—amid a resurgence in risk-taking among investors.
Currently, S&P 500 futures are reflecting a 0.3% increase, hovering around 7,360, indicating a robust appetite for riskier assets. The US Dollar Index (DXY), which measures the dollar’s value against six prominent currencies, is trading 0.16% lower at approximately 98.10, following a bounce-back on Thursday.
The renewed interest in risk-sensitive assets can be attributed to statements from US President Donald Trump, who confirmed the ongoing ceasefire with Iran despite recent tensions, including exchange of attacks near the Strait of Hormuz. Markets seem to react positively to the easing of immediate geopolitical concerns.
Attention is turning towards the upcoming US Nonfarm Payrolls (NFP) data slated for release at 12:30 GMT. Investors are keenly monitoring these figures for insights into the Federal Reserve’s monetary policy trajectory. Current forecasts suggest that the economy added 62,000 new jobs in April, dramatically lower than the previous month’s figure of 178,000.
From a technical perspective, the GBP/USD pair appears to be on a bullish path, trading at approximately 1.3590 at the time of writing. The currency pair remains comfortably above key technical indicators, including the 20-day exponential moving average (EMA) at 1.3519 and the 50% Fibonacci retracement level at 1.3512. Briefly touching into a significant retracement zone, immediate overhead resistance lies at the 61.8% Fibonacci level around 1.3595. The mid-range Relative Strength Index (RSI), currently near 58, suggests that upward momentum is present but not overly extended.
If GBP/USD manages to surpass the 61.8% retracement at 1.3595, it could pave the way for a move towards the 78.6% Fibonacci barrier at 1.3713, which would place it closer to the recent cycle high of 1.3864. Conversely, if the pair experiences a downturn, initial support is anticipated at the 20-day EMA at 1.3519, bolstered by the 50% retracement level at 1.3512. Should the currency pull back further, it may test the 38.2% retracement at 1.3428 and the 23.6% level at 1.3325, which could challenge the broader bullish structure before approaching the swing low at 1.3159.
Investors are advised to remain vigilant as the NFP data release approaches, as the market’s reaction will likely be influenced by the overall assessment of the report and its implications for the US economy and the dollar’s standing.
