GBP/USD Forecast: Bulls eye 1.3570 as the next target

GBP/USD has extended its rebound after UK inflation data.
The technical outlook suggests there is more room on the upside before GBP/USD turns overbought.
The next bullish target is located at 1.3570.

Eren Sengezer FXStreet

GBP/USD has preserved its bullish momentum following Wednesday's advance and trades at fresh eight-day highs above 1.3500 early Thursday.

The stronger-than-expected Consumer Price Index (CPI) data from the UK reminded investors of the strong probability of the Bank of England (BoE) hiking the policy rate by 20 basis points in December and provided a boost to the British pound. Additionally, the modest selling pressure surrounding the greenback on falling US Treasury bond yields helped bulls to continue to dominate GBP/USD's action.

In the meantime, things remain relatively quiet on the Brexit front, allowing GBP/USD to continue to retrace the BoE-inspired drop.

The US Department of Labor's weekly Initial Jobless Claims will be the only data featured in the US economic docket. Furthermore, market participants will keep a close eye on US Treasury bond yields following Wednesday's sharp decline. Unless the benchmark 10-year US T-bond yield reclaims 1.6%, the greenback could find it difficult to outperform its rivals. Additionally, S&P Futures are up 0.2% in the early European session and the dollar could face additional selling pressure in case risk flows start to dominate the markets in the second half of the day.

GBP/USD Technical Analysis

Although the last six candles on the four-hour chart closed in positive territory, the Relative Strength Index (RSI) indicator stays below 70, suggesting that there is more room on the upside before GBP/USD becomes technically overbought.

As of writing, the pair is trading above 1.3500 - the Fibonacci 61.8% retracement of the downtrend witnessed following the BoE's decision to leave its policy rate unchanged earlier in the month. In case buyers manage to continue to defend this level, GBP/USD could continue to push higher toward 1.3550 (100-period SMA) and 1.3570 (static level).

On the downside, 1.3470 (Fibonacci 50% retracement, 50-period SMA) aligns as the first support before 1.3440 (Fibonacci 38.2% retracement) if 1.3500 fails.

Premium

You have reached your limit of 3 free articles for this month.

Start your subscription and get access to all our original articles.

Subscribe to Premium Sign In

Author

Eren Sengezer

FXStreet

As an economist at heart, Eren Sengezer specializes in the assessment of the short-term and long-term impacts of macroeconomic data, central bank policies and political developments on financial assets.

USD/JPY: Japanese Yen tumbles as Fed signals higher rate path

The Japanese Yen depreciated against the US Dollar on Wednesday after the US Federal Reserve delivered a hawkish hold, with most officials expecting one rate hike towards the end of the year, while the new Fed Chair, Warsh, reiterated the Fed’s commitment to achieving the 2% inflation goal. At the time of writing, the USD/JPY trades at 160.66 after bouncing off the daily low of 160.11.

AUD/USD benefits from softer USD as US-Iran deal counters Fed's hawkish tilt

AUD/USD edges higher during the Asian session on Thursday as the US Dollar retreats from its highest level since late March, touched in reaction to the Fed's hawkish tilt the previous day. The US and Iran signed a MoU aimed at ending the war and reopening the Strait of Hormuz, boosting investors' confidence and undermining the safe-haven USD. Furthermore, the RBA's signal that additional rate hikes remain possible, if inflation persists, acts as a tailwind for the Aussie.

Gold slumps to near $4,250 as Fed holds rates but flags potential hike this year

Gold price tumbles to around $4,280 during the early Asian session on Thursday. The precious metal faces some selling pressure after the US Federal Reserve decided to hold its benchmark interest rate steady but signaled a hike in borrowing costs later this year.

Bitcoin remains under bearish pressure despite recent rebound — Glassnode

Bitcoin remains well below key onchain metrics, with realized losses continuing to dominate capital flows despite a partial price recovery. The top crypto rebounded from lows near $60,000 to the $65,000 range after the US-Iran peace deal reversed much of the war premium that had weighed on risk assets.

The next big AI trade may not be about chips or software

Artificial intelligence has already created some of the biggest winners in modern market history. Chipmakers have surged, data centre construction is booming, and electricity demand forecasts are changing globally.

Why a hawkish RBA is no longer enough to lift the Australian Dollar

The Reserve Bank of Australia delivered more than what markets expected: a hawkish hold that should have supported the Aussie. But markets widely ignored it, focusing instead on slowing economic growth and proving that central bank messaging alone isn’t always enough to drive currencies.