- GBP/USD has continued to edge lower amid unabated dollar strength.
- 1.3000 aligns as the next bearish target for the pair.
- The pound needs to reclaim 1.3100 to alleviate the bearish pressure.
GBP/USD has started to edge lower after having closed the previous day virtually unchanged slightly below 1.3100. The technical outlook shows that the pair's bearish bias stays intact in the near term.
Following Wednesday's Fed-inspired rally, the greenback lost its strength during the first half of the day on Thursday. Hawkish comments from FOMC policymakers, however, allowed the dollar to regain its traction later in the day and didn't allow GBP/USD to rebound.
Atlanta Fed President Raphael Bostic and Chicago Fed President Charles Evans both noted that it would be appropriate to move the policy to a neutral level toward the end of 2022. On an even more hawkish tone, St Louis Fed President James Bullard argued that they might need to raise the policy rate toward 3.5% this year to be able to battle inflation.
As it currently stands, markets are pricing a 56.2% probability of a total of 100 basis points in the next two meetings.
Meanwhile, the upbeat market mood, as reflected by a nearly-1% increase witnessed in the UK's FTSE 100 Index, is helping the British pound limit its losses for the time being.
There won't be any high-tier data releases on Friday and market participants are likely to remain focused on the risk perception. The UK announced earlier in the day that Russian President Putin's daughters and Foreign Minister Sergey Lavrov have been added to the sanctions list.
GBP/USD Technical Analysis
GBP/USD was last seen trading slightly below the static level that seems to have formed at 1.3050. In case the pair fails to start using that level as support again, it could fall toward 1.3025 (daily low) and renew its lowest level since November 2020 at 1.3000 afterwards.
Confirming the bearish bias, the Relative Strength Index (RSI) indicator on the four-hour chart stays below 40.
On the upside, the descending trend line coming from March 23 acts as dynamic resistance at 1.3080 ahead of 1.3100 (50-period SMA, static level). In case buyers manage to lift the pair above the latter, it could extend its recovery toward 1.3140 (100-period SMA).
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