GBP/USD Technical Outlook: Key Levels Ahead of US Employment Data

The US Dollar continues to maintain strong structural support ahead of the US labor market report, keeping the GBP/USD currency pair under persistent downside pressure. Federal Reserve policy expectations remain firm following hawkish comments from Cleveland Fed President Beth Hammack regarding restrictive policy settings. With money markets pricing in potential rate hikes in December and March, the broader macroeconomic backdrop continues to favor the greenback over risk-sensitive currencies.

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Today's Nonfarm Payrolls report serves as the primary catalyst for short-term price action. Forecasts project job gains of 65,000 alongside a 0.3% month-on-month rise in average hourly earnings. An inline or stronger release would reinforce the Fed's monetary tightening path, driving Treasury yields higher and exerting renewed selling pressure on the pound. Conversely, weaker labor market metrics alongside disappointing University of Michigan Consumer Sentiment data could spark a corrective recovery in GBP/USD.

From a technical standpoint, recent price action near the 1.3420 resistance level saw the MACD indicator extend deep into negative territory, indicating strong momentum behind the prevailing move. Intraday upside scenarios center on a breach of the 1.3395 entry level toward 1.3423, provided the MACD indicator crosses above the zero line. The 1.3423 zone represents a major profit-taking target and a potential turning point for a 30-to-35 pip downward pull back.

A secondary bullish setup relies on a double test of the 1.3373 support level while the MACD reflects oversold conditions. This configuration would signal downside exhaustion, creating opportunities for a bullish technical reversal back toward 1.3395.

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On the downside, a decisive break below the 1.3373 support level—confirmed by a declining MACD below the zero line—opens the door for a rapid extension toward 1.3348. Short positions at 1.3348 are projected for immediate closure, with potential long reversals targeting 20 to 25 pips. Alternatively, if price action tests 1.3395 twice under overbought MACD conditions, downside pressure is expected to resume toward 1.3373 and 1.3348.

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