The GBP/USD currency pair neared the 1.2900 barrier, driven by US dollar’s weakness following a mixed February NFP report. The pair’s strong uptrend, evident in its fifth consecutive positive trading day, reflects overbought conditions ahead of the NFP release.

Amid dominant risk flows, GBP/USD surged over 0.5% on Thursday, marking its highest level since August above 1.2800. The US Dollar Index fell to multi-week lows below 103.00 as Wall Street’s main indexes posted robust gains for a second day.

The US Bureau of Labor Statistics is set to unveil February’s labor market data, with NFP forecasted to rise by 200,000 post-January’s impressive 353,000 increase. A stronger NFP could trigger profit-taking, pushing GBP/USD lower before the weekend.

Conversely, a disappointing NFP could further weaken the USD, yet weekend flows might cap GBP/USD’s upside amid overbought conditions. The RSI indicator on the 4-hour chart remains above 70, signaling potential exhaustion in the pair’s upward momentum.

GBP/USD’s current level near 1.2830 marks a crucial resistance point where a December correction occurred. Clearing this hurdle could see 1.2900 as the next resistance, followed by 1.2940.

On the downside, 1.2800 acts as initial support, succeeded by 1.2780. A 4-hour close below the latter could extend the slide toward 1.2750.

Trade Idea:

Monitor GBP/USD around key resistance and support levels. Consider cautious positions amid overbought conditions and potential profit-taking scenarios following the NFP release.