The GBP/USD pair is trading cautiously amid a slight uptick in USD buying on Thursday. The BoE-Fed policy expectations continue to support the pair, but technical indicators suggest caution for bulls before further gains.
Currently, the pair is hovering around the 1.3085 region, maintaining its position near the highest level since July 2023. Traders are now eyeing the flash PMIs from the UK and the US for potential short-term opportunities.
The recent increase in US Treasury bond yields has helped the USD recover from its YTD low, putting pressure on the GBP/USD pair. However, reduced chances of a BoE interest rate cut in September offer some support. Additionally, expectations of a more aggressive Fed policy easing could limit USD gains and prevent significant losses for the pair.
Technically, the breakout above the 1.3000 mark and the previous YTD peak at 1.3045 have triggered bullish sentiment. However, with oscillators nearing overbought levels on the daily chart, it might be wise to wait for consolidation or a mild pullback before anticipating further gains. Despite this, the bias remains in favor of bulls.
For traders, a potential buying opportunity lies in the 1.3050-1.3045 region, with strong support near the 1.3000 mark. Failure to defend these levels could lead to a corrective decline towards 1.2950 and 1.2900. On the upside, breaking above 1.3120 could pave the way for further gains towards 1.3140 and beyond.
Overall, the GBP/USD pair is poised for further upside momentum, but caution is advised for traders as technical indicators suggest a possible pullback. Keeping an eye on key support and resistance levels will be crucial for navigating potential market movements.
GBP/USD daily chart
Pound Sterling FAQs
The Pound Sterling (GBP) is the oldest currency in the world, official currency of the United Kingdom, and the fourth most traded unit for foreign exchange. It is heavily influenced by the Bank of England’s monetary policy decisions and key economic indicators. Traders should pay attention to interest rate adjustments, economic data releases, and trade balance reports to gauge the health of the GBP and make informed trading decisions.