GBP/USD whips around 1.3250 ahead of expected EU tariff responses, US NFP risk event

• Sterling trying to clamber higher ahead of a tense Friday sees EU responses to metals tariffs.
• US NFP figures drop later to cap off the week’s action.

The GBP/USD is trading up towards 1.3270 at the outset of the European market session.

Market sentiment shifted following the US’ decision to impose steel and aluminum tariffs on three of America’s closest allies, and traders recoiled at the ramping-up of a potential trade war, and markets are awaiting further responses from Canada, Mexico, and the EU.  

Friday also brings the  US NFP figures at 12:30 GMT, and the high-volatility report is expected to come in at 188 thousand, a decent tick higher than the previous figure of 164 thousand.

In the London market session, Markit PMIs drop at 08:30 GMT, expected to decline from 53.9 to 53.5.

GBP/USD levels to watch

The Sterling’s attempts to form up a bullish technical correction appear to be fizzling out quickly, and as FXStreet Chief Analyst Valeria Bednarik noted, “the short-term picture for the pair is neutral, as the pair is hovering around a flat 20 SMA, while technical indicators diverge from each other the Momentum heading higher above its mid-line, and the RSI heads lower around 45. The risk remains leaned to the downside despite the ongoing absence of directional strength, with a break now below 1.3245 required to confirm a new leg south.”

Support levels: 1.3245 1.3200 1.3160  

Resistance levels: 1.3315 1.3360 1.3400