- GBP/USD remains confined in a narrow range for the second straight day on Wednesday.
- The mixed fundamental backdrop holds back traders from placing fresh directional bets.
- A break below the 1.2645-1.2640 confluence support will pave the way for deeper losses.
The GBP/USD pair extends its sideways consolidative price move for the second straight day and remains confined in a narrow range below the 1.2700 mark during the Asian session on Wednesday. The lack of any meaningful buying, meanwhile, warrants some caution before positioning for an extension of the recent bounce from the 1.2625-1.2620 region, or the lowest level since mid-May touched last Friday.
Against the backdrop of the Federal Reserve's (Fed) hawkish surprise earlier this month, policymakers have backed the case for keeping interest rates higher for longer. The markets, however, are still pricing in a greater chance that the US central bank will start cutting interest rates in September, which keeps the US Dollar (USD) bulls on the defensive and acts as a tailwind for the GBP/USD pair. That said, the Bank of England's (BoE) dovish pause last week caps the upside for the British Pound (GBP) and the currency pair ahead of the UK general election on July 4.
From a technical perspective, the recent pullback from the 1.2860 area, or a three-month peak touched on June 12 stalled near the 50-day Simple Moving Average (SMA). The said support is currently pegged near the 1.2645-1.2640 region, which now coincides with the 100-day SMA and should act as a key pivotal point. A convincing break below will be seen as a fresh trigger for bearish traders and drag the GBP/USD pair further below the 1.2600 round figure, towards testing the next relevant support near the 1.2560-1.2555 zone en route to the 1.2500 psychological mark.
On the flip side, the 1.2700 round figure is likely to act as an immediate hurdle ahead of the 1.2720-1.2725 supply zone. Some follow-through buying and a sustained strength beyond will suggest that the recent corrective decline has run its course. Given that oscillators have been recovering on the daily chart, the GBP/USD pair might then accelerate the move towards reclaiming the 1.2800 mark. Bulls might eventually aim to challenge the multi-month top, around the 1.2860 region, and lift spot prices further towards the 1.2900 round figure.
GBP/USD daily chart
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers. The author will not be held responsible for information that is found at the end of links posted on this page.
If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.
FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.
The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.
Recommended content
Editors’ Picks
AUD/USD consolidates near two-week high, looks to US NFP for fresh impetus
AUD/USD holds steady around the 0.6335 area during the Asian session on Friday as traders now await the US NFP report. Bets that the Fed will cut rates further amid concerns over failing US economic growth keep the USD depressed near a multi-month low and act as a tailwind for spot prices, though tariff jitters warrant caution for bulls.
USD/JPY seems vulnerable amid divergent Fed-BoJ expectations; US NFP awaited
USD/JPY languishes near its lowest level since October touched on Thursday amid a bearish USD, led by bets that the Fed could cut rates multiple times in 2025 amid slowing US economic growth. Moreover, the hawkish sentiment surrounding the BoJ's policy outlook underpins the JPY and validates the negative bias for the pair.
Gold price remains depressed ahead of US NFP; trade jitters to limit losses
Gold price trades with negative bias for the second straight day, though a combination of factors continues to act as a tailwind ahead of the crucial US NFP report later this Friday. Rising trade tensions continue to weigh on investors' sentiment.
XRP investors enlarge realized profits to $2 billion despite potential inclusion in US crypto reserve
Ripple's XRP managed to record gains on Thursday despite investors expanding their total realized profits to about $2 billion since the beginning of the week.
Make Europe great again? Germany’s fiscal shift is redefining the European investment playbook
For years, Europe has been synonymous with slow growth, fiscal austerity, and an overreliance on monetary policy to keep its economic engine running. But a major shift is now underway. Germany, long the poster child of fiscal discipline, is cracking open the purse strings, and the ripple effects could be huge.
The Best brokers to trade EUR/USD
SPONSORED Discover the top brokers for trading EUR/USD in 2025. Our list features brokers with competitive spreads, fast execution, and powerful platforms. Whether you're a beginner or an expert, find the right partner to navigate the dynamic Forex market.