British Pound struggles near June 26 lows as USD retains bullish tone ahead of US NFP

The GBP/USD currency pair fell to its lowest level since June 26, trading below the 1.3200 mark during the Asian session on Friday, as the US Dollar (USD) remained bullish. Traders anticipate fresh impetus from the US Nonfarm Payrolls (NFP) report, as the Federal Reserve (Fed) may reconsider its future policy path due to dwindling expectations of a potential October rate hike.

The USD Index (DXY) remains near a one-and-a-half-year top, supported by oil-driven inflation fears and limited geopolitical uncertainties. Meanwhile, 30-year gilt yields surpassed 6% for the first time since early 1998, raising concerns about the UK's fiscal situation ahead of the Autumn Budget on October 28. This negatively impacts the British Pound (GBP), which is viewed as another factor weighing on the GBP/USD pair.

The GBP/USD pair is expected to face further downside, potentially reaching the year-to-date low around the 1.3140 region and the 1.3100 level if broken. However, a recovery is more likely to be met with resistance at the 1.3300 mark, with sustained strength required to support further upside. The GBP/USD pair may then target the important 200-day Simple Moving Average (SMA) at 1.3448.