GBP/USD Forecast: Bullish bias remains, dip-buying to help limit immediate downside

The recent Brexit optimism continued underpinning the British Pound on Thursday, pushing the GBP/USD pair higher for the fifth trading session in the previous session. This coupled with some heavy US Dollar selling, weighed down by a combination of negative forces, lifting the pair to three-week tops, around mid-1.3200s.

Against the backdrop of a rout in global equity markets, retracing US Treasury bond yields kept the USD bulls on the back-foot through the European trading session and the selling pressure aggravated following the release of softer-than-expected US consumer inflation figures. Meanwhile, the US President Donald Trump's criticism over the pace of Fed rate hikes, saying that the Fed is too aggressive and that they are making a big mistake, exerted some additional downward pressure on the greenback. 

The pair now seems to have entered a bullish consolidation phase and in absence of any major market moving economic releases from the UK, the pair remains at the mercy of any fresh Brexit-related news/developments. Later during the early North-American session, the US economic docket, featuring the release of Prelim UoM Consumer Sentiment, will now be looked upon for some short-term trading opportunities. 

From a technical perspective, the pair retains its near-term bullish bias. With short-term technical indicators on the daily chart holding in bullish territory, the positive momentum seems more likely to get extended beyond the 1.3270-75 intermediate resistance towards testing the 1.3300 handle, marking 38.2% Fibonacci retracement level of the 1.4377-1.2662 downfall. 

On the flip side, the 1.3200 handle, closely followed by the 1.3180 region now seems to protect the immediate downside. Any subsequent fall below the mentioned supports might now be seen as an opportunity to initiate fresh long positions and thus, limit the further downside near 100-day SMA support, currently near the 1.3100 handle.