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The GBP/USD pair rose modestly on Friday as the US Dollar weakened against the British Pound amid thin holiday trading volumes. With the US Non-Farm Payrolls (NFP) report due later in the week, market participants are closely monitoring the Dollar's performance. The lack of major economic data from the UK and reduced liquidity during the holiday period have contributed to a sideways price action, with traders positioning ahead of the critical NFP release.
The Dollar's softness is driven by mixed economic signals and expectations of a potential Fed pause in rate hikes. A weaker USD supports the GBP/USD pair, but the market remains cautious ahead of the NFP data, which could trigger significant volatility. Traders are balancing between short-term technical levels and macroeconomic fundamentals, with the 1.2900 psychological level acting as a key resistance.
For the coming week, the focus will shift to the US employment report, which could determine the GBP/USD trajectory. A stronger-than-expected NFP might pressure the Pound, while a weaker report could boost the GBP/USD. Investors should also watch for any shifts in Fed rate expectations and UK inflation data updates.
