Last Updated on September 4, 2026 by Deon
GBP/USD gained momentum for a second day in a row yet it could not push higher than the 1.3500 area on Friday. The British Pound stayed supported against the US Dollar. Traders seemed cautious while they awaited the highly watched US Nonfarm Payrolls (NFP) report.
The key employment data may give clues about the direction of Federal Reserve policy and could spark more volatility in GBP/USD. Meanwhile the 1.3550 area still acts as a barrier for bullish traders.
GBP/USD Recovery Loses Momentum
GBP/USD recovered from a three‑week low reached earlier in the week drawing buyers for a second straight session.. The recovery did not have strong follow‑through as the US Dollar tried to regain some ground before the NFP release.
Investors seem reluctant to make bets before the employment report. The data could greatly affect expectations for US interest rate decisions making it an important event for the US Dollar and major currency pairs.
The latest report indicates that some repositioning before the jobs data helped the Dollar recover part of its losses. This limited GBP/USD. Kept the pair below the 1.3550 region.
US NFP Report Takes Center Stage
The US Nonfarm Payrolls report is expected to be the driver of market sentiment. A stronger-than-expected jobs report could support the US Dollar if investors think that a resilient labor market gives the Federal Reserve room to keep a restrictive monetary policy stance. This could put pressure on GBP/USD.
Conversely weaker employment figures could raise concerns about the strength of the US economy. Such an outcome may weigh on the Dollar if markets expect a Federal Reserve policy path.
The NFP report is particularly important because traders will look at not the headline employment figure but also other details in the broader labor market report. These numbers can affect expectations for inflation, interest rates and future Federal Reserve decisions.
Fed Rate Expectations Limit Dollar Strength
Despite the rebound in the US Dollar several factors could limit further gains. Reduced expectations for a September Federal Reserve rate hike and soft US bond yields have kept Dollar bulls from becoming overly aggressive. This may keep some support for GBP/USD.
The market faces competing forces. On one side traders buy the Dollar ahead of an economic release and react to geopolitical uncertainty. On the side softer bond yields and shifting expectations for Federal Reserve policy limit the Greenbacks upside.
Renewed tensions involving the US, Iran and the Strait of Hormuz have also boosted safe‑haven demand for the Dollar according to the report. However these factors have not been enough to create an sustained bullish move in the US currency.
GBP/USD Technical Outlook Remains Mildly Bullish
From a perspective GBP/USD continues to show a mild bullish bias. GBP/USD remains above the 200‑period Simple Moving Average on the four‑hour chart and above the 38.2% Fibonacci retracement level of the July‑to‑August rally. These technical signals suggest that buyers still have some control despite the slowdown in momentum.
The Relative Strength Index remains above the neutral 50 level while the MACD indicator stays in positive territory. Together these signals point to building upside pressure.
However bulls will need a break above nearby resistance to strengthen the positive outlook.
Key GBP/USD Levels to Watch
Several technical levels could guide the move in GBP/USD:
Immediate support: 1.3525
200‑period SMA support: Around 1.3490
Additional support: Near 1.3476
Deeper support: Around 1.3428
downside support: Near 1.3359
Immediate resistance: Around 1.3584
Next major resistance: Near 1.3681
The 1.3525 level is particularly important because it represents the 38.2% Fibonacci retracement and could act as the line of defense if selling pressure increases.
A sustained move below this level could expose the 1.3490 and 1.3476 support zones. On the hand a move above 1.3584 may strengthen bullish momentum and bring the 1.3681 region into focus.
What Could Happen After the NFP Release?
The US employment report could become the catalyst for the major GBP/USD move. If the NFP data is weaker than expected the US Dollar could come under renewed pressure. Falling expectations for Federal Reserve policy could support the British Pound and help GBP/USD challenge higher resistance levels.
A strong jobs report however could give the Dollar support. If Treasury yields also move higher GBP/USD may struggle to maintain its recovery and could return toward the 1.3525 or 1.3490 support areas.
Traders should also watch the markets reaction rather than focus only on the headline payroll figure. Wage growth, unemployment and other labor‑market details can influence how investors interpret the report.
Conclusion
GBP/USD remains cautiously bullish but struggles to gain momentum below the 1.3550 area as traders await the US Nonfarm Payrolls report. The pair receives support from US bond yields and reduced expectations for a September Fed rate hike. However a modest recovery in the US Dollar and continued geopolitical uncertainty limit gains.
From a perspective GBP/USD maintains a mild bullish structure while holding above key support levels. The next major move will likely depend on the US jobs data and its impact on Federal Reserve expectations.
A weak NFP report could push GBP/USD higher while stronger employment data may support the Dollar and trigger a move toward important support zones. For now the market remains focused, on whether bulls can overcome resistance and extend the recovery.
