GBP/USD on pause just above 1.29 ahead of Friday's US NFP

The GBP/USD is heading into a dense Friday trading tightly just above the 1.2900 handle, and Sterling traders will be bracing for a London market session that will be seeing potential knock-on volatility from a top-tier GDP reading for the European Union, the UK's closest neighbor, with the US Non-Farm Payrolls showing following closely behind.

The UK has a thin showing on the economic calendar on its own today, with the low-tier Halifax Housing Prices for August at 07:30 GMT, which is also expected to come in at -0.3% m/m compared to the 1.4% previous reading. At 09:00 GMT the EU's Q2 GDP will be dropping just across the Channel, and traders will be looking for the q/q non-preliminary reading to hold steady at 0.4%, though any deviations could see some weakness build into USD-based pairs, especially if the actual figures miss the fairly-accurate preliminary reading.

August's NFP for the US, dropping at 12:30 GMT, is expected to be a good-on-the-outside jobs report, with median market forecasts calling for a print of 191 thousand jobs added in August, compared to the previous month's 157 thousand; buried under the headline figure, Average Hourly Earnings for the year into August are expected to hold steady at 2.7%. Wage growth has been a vexing issue for the Federal Reserve, and continued sluggishness in the underlying reading could see clouds gather over the main NFP report, which has developed a habit of beating expectations recently.

GBP/USD levels to watch

After catching a Brexit boost earlier in the week as investors begin to firm up hopes of a soft-Brexit scenario as the UK and Germany appear ready to begin working together, and the Sterling has managed to hold onto some of the lift experienced earlier in the week, and as https://www.fxstreet.com/analysis/gbp-usd-analysis-brexit-uncertainty-keeps-investors-sidelined-201809061848FXStreet's own Valeria Bednarik noted: "in the meantime, the pair retains a mildly positive tone in the short-term, given that in the 4 hours chart, technical indicators remain well above their midlines, although losing upward strength. The 20 SMA in the mentioned chart has turned flat, now around the key Fibonacci level at 1.2890, reinforcing it. The pair, however, seems unable to surpass the 200 EMA, which is any way flat but tends to act as a directional barrel in GBP crosses."

Support levels: 1.2890 1.2845 1.2800  

Resistance levels: 1.2930 1.2980 1.3010