GBP/USD reaches 1.33, on top as ADP Employment Miss sends the dollar in a limbo

The week had started slowly in FX markets, characterized by mean-reverting, small up-and-down movements across all currencies as traders got back from their Thanksgiving break and awaited fresh data.

The US Dollar was holding its range calmly, bouncing yesterday, but the landscape shifted dramatically today.

The fresh monthly ADP Private Employment data delivered a shocker to the Market showing a contraction of -32,000 jobs (vs +10,000 gain exp).

This reading only anchors the rate cut expectations for next Wednesday's FOMC meeting (December 10th), effectively locking in the decision.

With US Yields diving lower on the news, traders are now starting to aggressively price in further cuts for later meetings in 2026 – the following will be on January 28th, as the debate over December becomes clear—the focus has shifted to how deep the recessionary cracks might be if US rates stay high.

These dynamics have taken Sterling (GBP) to the top of the majors, sitting at the other extreme of the Greenback. But why is the GBP performing so well?

Beyond the Dollar weakness, the Pound is enjoying its own tailwinds.

The recently announced trade deal with the US regarding 0 tariffs on pharmaceuticals—which exempts UK exports from tariffs in exchange for pricing adjustments—has provided a massive boost to GBP/USD.

This comes as a relief for the Pound after the pair had dropped considerably throughout October, coming close to breaching the 1.30 level. Furthermore, the recent UK Budget had already restored some confidence in government spending, a sentiment exacerbated by Bank of England rates, which are now priced to remain the highest among OECD nations as inflation remains stickier than elsewhere.

Enough talk, let's dive right into a multi-timeframe analysis of GBP/USD to spot where things could head towards for this Major FX pair.

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Cable has now rallied 2.20% from its November lows (1.30130) and reaching the 1.33 psychological level.

Last month's trading was cataclysmic for Sterling, stuck in a downward trend but after its trough in early November, a following higher low as dovish bets raced back for the Fed was enough fuel to propel the currency higher to a breakout of its September descending Channel.

However, some crosscurrents are facing buyers:

• The 200-Day Moving Average is acting as immediate resistance (Daily Highs at 1.33215)
• The 50-Day MA recently posted a death cross (crossing below the 200-Day MA).

A close above the 200-MA should be enough to invalidate the mean-reverting elements with the next resistance being 1,000 pips higher to 1.34.

Conflicting signs arise on intraday charts: a break-retest of the channel points to buyer strength toward higher levels, supported by a bullish 50-200 MA Cross on the 4H timeframe.

On the other hand, a 4H bearish divergence is forming a could slow down the action.

After marking the technical levels, let's check out the shorter timeframe to spot a potential gameplan.

Levels to watch for the GBPUSD:

Resistance Levels

• Daily highs and 200-Day MA 1.3320
• 1.34 Key Pivot
• Resistance 1.3450 to 1.34650
• Resistance at the 1.36 zone

Key Pivot Zone: 1.3450 to 1.3650

Support Levels

• Pivotal Support 1.3260-1.33 (Immediate test)
• 1.32 4H MA 50 and 200
• S2 1.3170 - 1.31850
• S3 at 1.30 Zone (+/- 300 pips)

Buyers have taken control of the action with the ongoing tight bull channel action across intraday timeframes, with the entire short-term trend evolving within a fresh upward hourly channel.

Any retracement may hint at a test of the 1.3260 Support lows while a break above the 200-Day MA (1.3320) would purse the current buyer strength.

Safe Trades!

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