- GBP/USD drifts lower on Thursday amid the hawkish Fed-inspired USD buying interest.
- The mixed technical setup warrants some caution before positioning for deeper losses.
- A daily close above the 1.2800 mark will set the stage for a further appreciating move.
The GBP/USD pair edges lower during the Asian session on Thursday and retreats further from over a three-month top, around the 1.2860 region touched the previous day, in reaction to softer US consumer inflation figures. Spot prices, for now, seem to have snapped a three-day winning streak and currently trade around the 1.2785 area, down 0.10% for the day.
The US Dollar (USD) builds on the overnight bounce from the weekly low in the wake of the Federal Reserve's (Fed) hawkish surprise, indicating that fewer rate cuts were needed this year. Moreover, flash figures published on Wednesday showed that the UK economic growth stalled in April after the muted rebound from last year’s recession. This, in turn, is seen undermining the British Pound (GBP) and contributing to the offered tone surrounding the GBP/USD pair.
From a technical perspective, the recent repeated failures to find acceptance above the 1.2800 mark warrant some caution for bullish traders ahead of the UK national election on July 4. That said, mixed oscillators on the daily chart make it prudent to wait for strong follow-through selling before confirming that the recent strong rally from the YTD trough touched in April has run its course and positioning for any meaningful depreciating move for the GBP/USD pair.
Meanwhile, any further decline is more likely to find some support near the 1.2755-1.2750 horizontal zone, below which spot prices could slide to the 1.2715-1.2710 intermediate support. The downfall could extend further towards the 1.2690-1.2685 region en route to the 100-day Simple Moving Average (SMA) support, currently pegged near the 1.2640-1.2635 area. A convincing break below the latter will be seen as a fresh trigger for bears and pave the way for further losses.
On the flip side, positive momentum back above the 1.2800 mark might continue to face resistance near the 1.2855-1.2860 region. A sustained strength beyond should allow the GBP/USD pair to retest the YTD peak, around the 1.2900 neighborhood touched in March, and climb further towards the 1.2950 resistance before aiming to reclaim the 1.3000 psychological mark for the first time since July 2023.
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
EUR/USD dips below 1.1000 as Trump authorizes 90-day pause on tariffs
EUR/USD retreated below the 1.1000 mark on headlines indicating that United States President Donald Trump authorized a 90-day pause on non-retaliating countries. The pause applies to reciprocal and 10% tariffs, effective immediately, according to a Truth Social post. FOMC Minutes indicated increasing uncertainty.
GBP/USD eases further on tariffs pause announcement, USD still weak
GBP/USD's correction seems to have met a decent contention around the 1.2750 zone so far on Wednesday, as investors continue to assess the ongoing US-China trade war. US doubles the bet, announced 125% levies on Chinese imports.
Gold recedes to $3,050 on Trump's headlines
Gold prices now give away part of their advance and revisit the $3,050 zone per troy ounce after President Trump announced a 90-day pause on reciprocal and 10% tariffs. FOMC Minutes passed unnoticed as optimism returned.
Dow Jones Industrial Average rockets 6% higher on tariff suspension
The Dow Jones Industrial Average (DJIA) skyrocketed on Wednesday, surging over 6% on the day and returning to the 40,000 handle after the Trump administration announced yet another pivot on its own tariff policies.
Tariff rollercoaster continues as China slapped with 104% levies
The reaction in currencies has not been as predictable. The clear winners so far remain the safe-haven Japanese yen and Swiss franc, no surprises there, while the euro has also emerged as a quasi-safe-haven given its high liquid status.
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.