GBP/USD Forecast: Sellers to take action if 1.1500 support fails

GBP/USD has failed to build on Wednesday's modest recovery gains and has gone into a consolidation phase above 1.1500 on Thursday. The near-term outlook points to a bearish bias and a four-hour close below 1.1500 could trigger another leg lower.

Following Tuesday's impressive rally, the US Dollar Index staged a downward correction on Wednesday and allowed GBP/USD to post daily gains. The UK's FTSE 100 Index is up more than 0.5% on Thursday, helping the British pound stay resilient. Nevertheless, the pair is likely to have a hard time gaining traction unless Wall Street's main indexes rise sharply after the opening bell. As of writing, the US stock index futures were trading virtually unchanged on the day.

Meanwhile, the quarterly survey conducted by the Bank of England (BOE) showed that the UK public year-ahead inflation expectations climbed to 4.9%, the highest print since the survey began in 1999. According to Reuters, markets are currently pricing in a 56% probability of the BOE hiking its policy rate by 75 basis points next week.

Later in the session, the US Census Bureau will release August Retail Sales data, which is expected to remain unchanged on a monthly basis. This data by itself is unlikely to impact the market pricing of the Fed's rate outlook. In case there is a noticeable increase in Retail Sales, that could help the market mood improve and limit the dollar's gains. The weekly Initial Jobless Claims and August Industrial Production data will also be featured in the US economic docket.

Ahead of the BoE's and the Fed's monetary policy announcements next week, investors could refrain from making large bets and keep a close eye on technical developments.

GBP/USD Technical Analysis

The Relative Strength Index (RSI) indicator on the four-hour chart stays below 50, revealing a lack of buyer interest. Additionally, the pair failed to flip the 50-period SMA into support after having climbed above it on Wednesday.

On the downside, 1.15000 (psychological level, static level) aligns as key support. In case GBP/USD falls below that level and starts using it as resistance, it could stretch lower toward 1.1450 (static level) and 1.1400 (end-point of the latest downtrend, psychological level).

Initial resistance is located at 1.1550 (50-period SMA) before 1.1600 (100-period SMA, Fibonacci 23.6% retracement of the latest downtrend) and 1.1670 (static level).