The Pound pulled back from weekly highs above 1.3700 and slipped to around 1.3680 on Wednesday. A softer US Dollar, after weak US data on Tuesday, helped limit the decline. At the same time, UK political uncertainty continued to weigh on Sterling.
Markets remain cautious ahead of the delayed US Nonfarm Payrolls report, due later on Wednesday. Forecasts suggest 70K jobs were added in January, up from 50K in December. Unemployment is expected at 4.4%, while annual wage growth is seen at 3.6%, down from 3.8%.
Technical Picture For Gbp Usd
GBP/USD recovered part of its losses and traded near 1.3680 during European hours. The daily chart shows the pair still moving inside an ascending channel.
The 14-day RSI is 55.94, which is above 50. The nine-day EMA is above the 50-day EMA, with the 50-day EMA at 1.3518. The pair also remains above both averages.
The Pound has retraced some recent losses against the US Dollar, but it is still struggling to break clearly above 1.2900. The current pause around 1.2850 appears linked to a slightly better UK economic backdrop, which is being offset by the Federal Reserve’s firm stance on interest rates. This looks similar to the uncertainty seen in early 2025, when rate decisions were also unclear.
Derivative traders should stay cautious ahead of the US Nonfarm Payrolls release. Recent surveys from major financial news outlets put expectations at around 95,000 net new jobs, with unemployment holding at 3.9%. A weaker-than-expected result could pressure the Dollar and support the Pound.
Options Strategy And Key Support
Given this setup, buying near-term GBP/USD call options may be a sensible strategy for the coming weeks. For example, calls with a 1.2950 strike would offer upside exposure if the US jobs data is weaker than expected. This also helps limit downside risk if the Dollar strengthens unexpectedly.
The pair is still above its 50-day moving average, now near 1.2780, which suggests the medium-term trend remains positive. This level is similar to the support that held through the second half of 2025, before a strong rally. As long as price stays above it, a bullish bias makes sense.
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