GBP/USD bounces off lows, finds some support near 1.3100 mark

• A modest pickup in the USD demand prompted some fresh selling around GBP/USD on Friday.
• A turnaround in the risk sentiment benefitted the safe-haven USD and exerted some pressure.
• The downside remains limited as investors turn cautious ahead of the US monthly jobs report.

The GBP/USD pair edged lower during the early European session and refreshed daily lows, around the 1.3100 round-figure mark in the last hour.

The pair witnessed some selling on the last trading day of the week and eroded a part of the previous session's strong intraday rally of over 200 pips. As investors awaited the outcome of a nail-biting US presidential election, a turnaround in the global risk sentiment drove some haven flows towards the US dollar. This, in turn, was seen as a key factor exerting some pressure on the GBP/USD pair.

The markets have started betting that Democrat candidate Joe Biden will become the next US president. However, a victor is yet to be declared and the final result remains unclear two days after polls ended on Wednesday. The wait for the results and the high degree of uncertainty, along with diminishing hopes for large stimulus packages, kept investors on edge and dampened the market mood.

This was evident from a sharp pullback in the US equity futures, which provided a minor lift to traditional safe-haven assets. That said, the downside remains cushioned, at least for the time being, and the pair, so far, has managed to hold above the 1.3100 mark. Investors seemed reluctant to position for big moves in either direction ahead of Friday's release of the US monthly jobs data.

Apart from the NFP report, US political developments and the broader market risk sentiment will influence the USD price dynamics. Investors might also take cues from any Brexit-related updates to grab some meaningful trading opportunities ahead of the weekend.

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