Technical Analysis:
GBP/USD remains under technical pressure after ending Friday’s session near 1.3281, just below significant resistance at the flattening 10-day moving average (currently at 1.3336). Despite briefly bouncing after robust U.S. non-farm payroll data, sterling failed to hold above key resistance, leaving bears positioned to capitalize on the short-term momentum shift. This technical stall underscores the potential for a deeper corrective move heading into next week's critical monetary policy events from the Fed and BoE.

The immediate technical outlook is negative as long as GBP/USD remains below the 10-DMA. Short-term support at 1.3260-65 (Thursday and Friday lows) is now pivotal. A break and daily close below this support could signal a deeper pullback toward the 21-DMA at 1.3187, reinforcing bearish technical signals. Further downside momentum could see the pair testing the crucial 50% Fibonacci retracement at 1.3079, marking a significant medium-term pivot and potentially opening the way for a move toward the daily Ichimoku cloud top at 1.2865.

From a broader market perspective, the anticipated divergence between Fed and BoE policy stances—specifically a widely expected 25bp BoE rate cut versus a likely Fed hold—could exert fresh bearish pressure on sterling. Nonetheless, given expectations of convergence in U.S. and UK interest rates at around 3.6% by year-end, sustained weakness in GBP/USD may ultimately prove limited. Technical bulls would need a definitive move back above the 10-DMA at 1.3336 and subsequent break of the 2025 high at 1.3445 to convincingly shift the near-term bias positive once again.