GBP/USD backing away from the week's high with US NFP and tariff action in the pipe

• The Sterling is drifting back toward's the week's opening prices as a bullish correction looks set to end prematurely.
• Friday brings the US NFP, as well as the first volleys in a trade war between the US and China.

The GBP/USD has wound up flat on the week, trading just above the 1.3200 major level just ahead of London's Friday market opening, and the Sterling is struggling to develop a bullish correction against the Greenback after falling into new eight-month lows last week at 1.3049.

Friday is a thin showing for the GBP on the economic calendar, with only low-tier Halifax Housing Prices indicators due at 07:30 GMT, with the m/m figure expected to come in at 0.3% (last 1.5%).

The broader market focus will be on tariffs for Friday, with the US set to impose import fees on $34 billion in Chinese goods coming into effect after weeks of waiting. China has already promised a quick turnaround on retaliatory tariffs of their own, and the US will be busy getting ready for yet further tariffs to impose on $450 billion in Chinese trade goods.

Friday also brings the latest reading of the US Non-Farm Payrolls, dropping at 12:30 GMT, and as noted by FXStreet's own Valeria Bednarik, "market players are expecting the US economy to have added 195K new jobs in June, the unemployment rate is seen at record lows of 3.8%, while as usual, wages are barely expected to show signs of life, up monthly basis 0.3% and by 2.8% YoY."

GBP/USD levels to watch

The pair has slid towards the 1.3200 key level once again after peaking for the week near 1.3275, and a continued bearish move for the Sterling will quickly see the pairing fall into the week's low near 1.3095, while a further push below that will see the GBP/USD pushing into fresh lows for 2018 below 1.3050; meanwhile, a bullish reversal will have to contend with resistance from last week's high at 1.3290, with further support piled up from consecutive lower highs from 1.3445 to 1.3490.

Support levels: 1.3205 1.3170 1.3130     

Resistance levels:  1.3265 1.3300 1.3335