Sterling Holds Firm as Traders Await Critical U.S. Jobs Data

Key Moments

GBP/USD Steadies After Pullback From Recent Highs

The GBP/USD pair is seeing modest dip-buying during the Asian session on Friday, halting the prior day’s decline from levels slightly above the 1.3500 psychological barrier, which marked its strongest reading since mid-September. Market participants remain cautious ahead of the upcoming release of key U.S. monthly labor market data, leaving spot prices confined just above 1.3450, a marginal gain of 0.05% on the day.

The forthcoming U.S. Nonfarm Payrolls (NFP) report is expected to be a major catalyst for market expectations around the U.S. Federal Reserve’s policy decision in December. The outcome is likely to shape demand for the U.S. Dollar (USD) and could set the next directional move for GBP/USD. In the run-up to the data, a recent slide in U.S. bond yields and renewed optimism around diplomatic efforts with Iran have weighed on the safe-haven USD, lending support to the pair.

U.S. Political and Oil Market Developments Pressure the Dollar

An emphatic win for Democrats in the U.S. midterm elections has fueled expectations of a politically divided government, which could restrain fiscal spending and potentially slow economic momentum. Additionally, comments from top Senate Democrat Chuck Schumer on Wednesday, in which he vowed to push for an end to the Iran war, coincided with a weekly drop of more than 10% in crude oil prices. The pullback in oil has helped alleviate inflation concerns and driven U.S. bond yields down toward a near two-month low, limiting upside for the safe-haven USD.

BoE Hawkishness and UK Fiscal Policy Support Sterling

The British Pound (GBP) is also deriving strength from the Bank of England’s (BoE) recent policy stance. The BoE raised interest rates for the first time in more than three years and indicated that further tightening is likely unless the US-Iran war is resolved. This hawkish tone has underpinned the currency.

On the fiscal side, Chancellor John Healey’s 2026 Autumn Budget has helped reduce immediate concerns over a potential fiscal crisis, adding another supportive element for GBP and the GBP/USD pair.

Despite the current consolidation, GBP/USD remains poised to close the week higher for a fourth straight time. The underlying supportive backdrop suggests that any short-term corrective pullback is likely to be treated as a buying opportunity and may prove temporary.

Technical Picture: Key Levels in Focus

From a technical standpoint, GBP/USD is holding above the 200-day Simple Moving Average (SMA) at 1.3421 and above important Fibonacci retracement levels, maintaining a constructive short-term outlook. The pair is challenging a dense resistance area, with the 61.8% Fibonacci retracement at 1.3470 acting as the nearest ceiling and the next key test for buyers within the broader rebound from the 1.3138 cycle low.

A sustained move above the 61.8% retracement would expose the 78.6% level at 1.3560, followed by the August swing high at 1.3674, where a more substantial supply zone may emerge. On the downside, initial support is aligned at the 200-day SMA at 1.3421, followed by the 50.0% Fibonacci retracement at 1.3406. A deeper pullback would likely bring the 38.2% level at 1.3343 into view.