On Friday, during European trading, the GBP/USD pair was up by 0.25%, hovering around 1.3590. This indicates that the British pound (GBP) is performing well, outperforming most major currencies, except for those from the antipodes, as investor confidence grows.
As of now, S&P 500 futures have risen by 0.3% to about 7,360, signaling a strong interest in higher-risk assets. The US Dollar Index (DXY), which measures the dollar’s strength against six prominent currencies, was down by 0.16% at 98.10, pulling back from its recovery on Thursday.
Investor sentiment towards risk-sensitive assets has improved following President Trump’s confirmation that the cease-fire with Iran is still holding, even amidst tensions in the Strait of Hormuz.
Additionally, investors are keenly eyeing the upcoming U.S. Non-Farm Payroll (NFP) data, expected to be released at 12:30 PM Japan time. There’s a lot of anticipation around these numbers as they may provide insights into the Federal Reserve’s approach to monetary policy.
Economists predict that the labor market report will reveal the addition of only 62,000 new jobs, a steep decline compared to March’s figure of 178,000.
GBP/USD technical analysis
Currently, GBP/USD is trading at about 1.3590. The pair shows a bullish outlook, staying above the 20-day exponential moving average (EMA) at 1.3519 and the 50.0% Fibonacci retracement level at 1.3512. It has entered a crucial retracement area, with the 61.8% Fibonacci level at 1.3595 presenting immediate resistance, while the relative strength index (RSI) around 58 indicates reasonable bullish momentum.
A sustained break above the 61.8% retracement at 1.3595 could lead to testing the 78.6% Fibonacci threshold at 1.3713, beyond the recent cycle high of 1.3864. However, initial support lies at the 20-day EMA at 1.3519, supported by the 50.0% retracement at 1.3512. A more pronounced pullback might bring attention to the 38.2% level at 1.3428 and the 23.6% retracement at 1.3325, which could challenge the overall bullish sentiment before hitting the swing low at 1.3159.
