GBP/USD climbs further beyond mid-1.3600s, over one-week tops post-NFP

• GBP/USD attracted some dip-buying on Friday amid a modest USD pullback post-NFP report.
• The US economy added only 194K jobs in September; the unemployment rate fell below 5%.
• Elevated US bond yields helped limit any deeper USD losses and capped the upside for the pair.

The GBP/USD pair gained some positive traction in the last hour and shot to over one-week tops, around the 1.3655 region in reaction to mixed US employment figures

The pair attracted some dip-buying near the 1.3580-85 region on the last day of the week and turned positive for the second successive day. This also marked the sixth day of an uptick in the previous seven and got an additional boost from a modest US dollar weakness during the early North American session.

The greenback witnessed some selling after the headline NFP print missed expectations by a big margin and came in to show that the economy created only 194K jobs in September. This was well below consensus estimates for an addition of 500K, though was partly offset by an upward revision of the previous month's reading.

Additional details revealed that the unemployment rate fell below the 5.0% mark for the first time since the beginning of the pandemic in March 2020. The data, however, did little to dampen expectations that the Fed will soon begin tapering its bond purchases and possibly hike interest rates in 2022.

This was reinforced by a rather muted reaction in the money markets. In fact, the yield in the benchmark 10-year US government bond held steady near four-month tops, around 1.59%. This, in turn, continued acting as a tailwind for the greenback and kept a lid on any runaway rally for the GBP/USD pair, at least for now.

Technical levels to watch