GBP/USD dips to 1.3250 ahead of much-awaited NFP

Having posted a 4-week high level of 1.3318 on Thursday, the GBP/USD pair seems to witness some profit taking move and turned mildly lower to currently trade around mid-1.3200s ahead of the keenly watched US monthly jobs report.

The pair had a muted reaction to better-than-expected release of UK construction PMI as market seemed to have priced-in the outcome after Thursday's stellar manufacturing PMI. The UK construction PMI for August came-in at 49.2, rebounding from July's 45.9 and better-than 46.1 expected. 

Moreover, traders might have been inclined to take some profits off the table heading into the big event risk, the release of August NFP data, which determine the Federal Reserve's next monetary policy action and hence, would be the key driver for the pair in the near-term.

Technical outlook

Valeria Bednarik, Chief Analyst at FXStreet, notes, "A better-than-expected report will support the case presented by FED's Yellen last week of a sooner rate hike, and may see the GBP/USD falling down to the 1.3200 region, whilst below this last the 1.3160 is the next probable bearish target, although some buying interest may surge on retracements."

"Should the employment data disappoint, the pair can accelerate above a major resistance, 1.3320, the 23.6% retracement of the post-Brexit slump. Above it, the momentum will likely accelerate with 1.3360 and 1.3410 as the probable intraday bullish targets."