GBP/USD Drifts Lower Heading Into NFP Range

GBP/USD edged lower by 0.2% on Thursday, settling close to 1.3350 in a strained trading session that kept the pair pinned near three-month lows. Price briefly recovered earlier in the day on reports that Iran had indirectly signaled openness to talks with the CIA, but the bounce faded as Israeli officials reportedly advised Washington to disregard the overture. The pair is now congesting in a tight range around its key daily moving averages, with small-bodied candles over the past three sessions pointing to indecision after the sharp sell-off from the late-January high near 1.3870.

Chancellor Rachel Reeves delivered the Spring Statement on Wednesday, with the Office for Budget Responsibility (OBR) cutting its 2026 UK growth forecast to 1.1% from 1.4% in November. The OBR noted that the Middle East conflict, which escalated as the document was being finalized, "could have very significant impacts on the global and UK economies." The unemployment rate is now expected to peak at 5.3% later this year, well above the previous 4.9% forecast. The Bank of England (BoE) held rates at 3.75% in February by a narrow 5-4 vote, and surging Crude Oil prices on the Strait of Hormuz shutdown has dramatically shifted rate expectations: markets now price only a 20% chance of a cut at the BoE's March 19 meeting, down from roughly 75% a week ago, with just a single 25 basis point reduction expected for the full year.

On the US Dollar (USD) side, Federal Reserve (Fed) officials continue to ogle the possibility of raising rates if inflation stays above target, to the dismay of key policymakers who insist the time to cut is now. All eyes turn to Friday's Non-farm Payrolls (NFP) report, where consensus sits around 60K for February after January's above-trend 130K. A soft reading could revive rate-cut expectations and offer Sterling some relief, while a stronger number would reinforce the Fed's hawkish lean and likely push GBP/USD toward a fresh test of support below current levels.

GBP/USD daily chart

Technical Analysis

In the daily chart, GBP/USD trades at 1.3351. The near-term bias is mildly bearish as spot holds below the declining 50-day EMA near 1.35 while still hovering just above the flatter 200-day EMA around 1.34, highlighting a softening but not yet broken broader uptrend. Price has been grinding lower from the mid-1.38s, and the inability to reclaim the 50-day line keeps sellers in control on rallies. The Stochastic oscillator holds in the lower half of its range after recovering from oversold territory, which points to waning downside momentum but does not yet signal a convincing bullish reversal.

Immediate resistance emerges at the 1.3400–1.3500 area, where the 200-day EMA at 1.34 and the 50-day EMA slightly below 1.35 converge, and a daily close above this zone would be needed to ease current downside pressure and open a move back towards 1.36. On the downside, initial support is at the recent low near 1.3360, followed by 1.3300, where a break would confirm a deeper corrective phase and expose the next bearish target toward 1.32. As long as price trades beneath the 50-day EMA, rallies into the mid-1.34s are likely to attract selling interest.