GBP/USD Forecast: Traders likely to refrain from placing directional bets ahead of BoE on Thursday

The GBP/USD pair lacked any firm intraday directional bias on Tuesday and was confined well within the previous day's broader trading range. The pair gained some traction and climbed to an intraday high level of 1.2483 after the final UK Services PMI print for April was revised higher to 13.4 from 12.2 estimated earlier. However, a sudden pick up in the US dollar demand exerted some intraday bearish pressure during the European trading session. Given that the USD strength was solely led by some heavy pressure surrounding the shared currency, the pair lacked any strong follow-through selling, rather managed to attract some dip-buying near the 1.2420 region.

The pair moved back closer to daily swing highs, albeit struggled to capitalize on the move and remained below the key 1.2500 psychological mark. The pair once again started losing momentum following the release of better-than-expected US ISM Non-Manufacturing PMI, which came in at 41.8 for April as compared to 36.8 anticipated. This comes amid increasing prospects for an extended lockdown in the United Kingdom and persistent Brexit uncertainties, which capped any meaningful upside for the British pound. Adding to this, a US-China spat over the origin of the coronavirus further contributed towards keeping a lid on any positive move for the major.

The pair finally settled nearly unchanged for the day and extended its sideways consolidative price action through the Asian session on Wednesday. Market participants now look forward to the UK Construction PMI for some impetus. The gauge is anticipated to drop to 22 in April as compared to 39.3 in the previous month. Later during the early North-American session, the US private sector employment details – ADP report – will influence the USD price dynamics and produce some meaningful trading opportunities. Barring any immediate reaction, the pair seems more likely to remain confined in a range as investors might refrain from placing any aggressive bets ahead of the BoE on Thursday.

Short-term technical outlook

From a technical perspective, nothing seems to have changed much for the pair. Bearish traders are likely to wait for a sustained break below the 1.2400 mark before positioning for any further near-term depreciating move. Below the mentioned level, the pair is likely to accelerate the slide towards an intermediate support near the 1.2355-50 region. The next relevant support is pegged near the 1.2300 mark, which if broken decisively, should pave the way for a further near-term depreciating move.

On the flip side, the 1.2480-85 region now seems to have emerged as immediate resistance and is closely followed by the 1.2500 mark. Some strong follow-through buying might is likely to assist the pair to make a fresh attempt towards reclaiming the 1.2600 round-figure mark. The momentum could further get extended back towards challenging 200-day SMA, around the 1.2640-45 region, which if cleared might be seen as a fresh trigger for bullish traders and set the stage for a further near-term appreciating move.