GBPUSD has formed higher lows and higher highs to trade inside an ascending channel that’s been holding since mid-January. Price is in the middle of a correction to the Fibonacci retracement levels.

In particular, support seems to be holding at the 38.2% Fib near the mid-channel area of interest and 1.2567 mark. A larger pullback could reach the 50% Fib at 1.2520 or the 61.8% level at 1.2474 near the 200 SMA dynamic support and channel bottom.

On the subject of moving averages, the 100 SMA is above the 200 SMA to confirm that the path of least resistance is to the upside or that support is more likely to hold than to break. In that case, GBPUSD could soon make its way back up to the swing high at 1.2718 or higher.

Stochastic is also pointing up to signal that buyers are ready to return and allow the uptrend to gain traction. Sustained bullish momentum could even spur a break above the swing high and a steeper climb for the pair.

RSI has more room to slide before reaching the oversold region to reflect exhaustion among sellers, so the correction could keep going until that happens.

GBPUSD could take cues from US jobs data leading up to Friday’s NFP release, as the outcome of the jobs report could shape Fed interest rate expectations.

Strong data could point to a potential upside surprise, which might then weigh on easing speculations and lead to more gains for USD. On the other hand, weak jobs data could reinforce dovish Fed expectations and bring downside for the dollar.

Tariffs updates from the Trump administration are likely to spur volatility for USD pairs as well, with potential delays likely sparking risk-on flows and boosting higher-yielding currencies like GBP. On the other hand, more signs of global tensions could keep safe-havens like the dollar more supported.