GBP/USD Falls as Nonfarm Payrolls Loom, BoE Hawks Boost Dollar

The British Pound (GBP) rose against the US Dollar (USD) on Friday, but its advance was tempered by concerns over the upcoming Nonfarm Payrolls data for September. The GBP/USD pair traded at around 1.3208 during the Asian session, with the USD Index hovering near 101.93 after hitting a fresh high of 102.20 on Thursday.

Analysts at OCBC point out that this week's US labour market report is a key event risk for the Dollar, with consensus expectations suggesting nonfarm payrolls will rise by 90,000 in September, down from 162,000 in August. A stronger-than-expected employment report could reinforce expectations of further Fed tightening and support the USD.

Meanwhile, Bank of England (BoE) member Catherine Mann has admitted that the central bank made errors in assessing the consequences of energy supply shock, which boosted hawkish Fed expectations and drove up US Treasury Yields. The rally in the USD Index is expected to continue, with immediate resistance located at the 20-period EMA at 1.3333.

The GBP/USD pair continues to retreat away from the 20-period EMA, with the Relative Strength Index (RSI) hovering just above oversold territory. Looking down, the Year-Till-Date (YTD) low at 1.3140 is the major support level for the pair.