CFD Trading Rate Great Britain Pound vs US Dollar (GBPUSD)

• GBP/USD trades on a stronger note near 1.2580 on the weaker USD. 
• The pair keeps the bearish vibe below the key EMA; RSI indicator holds in bearish territory. 
• The immediate resistance level will emerge at 1.2617; 1.2540 acts as an initial support level. 

The GBP/USD pair recovers some lost ground and currently trades around 1.2580 on Wednesday during the early European session. The decline of the USD Index (DXY) and the dismal market mood in the UK economy act as a tailwind for the major pair. Later on Wednesday, the ADP Employment Change and the ISM Services PMI will be due. Also, Federal Reserve (Fed) Chair Jerome Powell's speech will be a closely watched event. 

Technically, the bearish outlook of GBP/USD remains intact as the major pair is below the key 50-period and 100-period Exponential Moving Average (EMA) on the four-hour chart with a downward slope. Furthermore, the downward momentum is confirmed by the Relative Strength Index (RSI), which hovers around 44.5 in bearish territory, supporting the sellers for the time being. 

The immediate resistance level for GBP/USD will emerge near the 50-period EMA at 1.2617. The next hurdle is seen near the 1.2650–1.2660 region, portraying the 100-period EMA and the upper boundary of the Bollinger Band. A break above the latter will pave the way to the 1.2700 psychological level. Further north, the next upside target is located at a high of March 18 at 1.2746. 

On the downside, a low of April 1 at 1.2540 acts as an initial support level for the major pair. The additional downside filter to watch is a low of April 1 at 1.2540. A breach of the lower limit of the Bollinger Band at 1.2525 will expose a low of December 8 and the round mark of 1.2500. 

GBP/USD four-hour chart

• GBP/USD trades on a weaker note near 1.2575 on Wednesday.
• Many Fed officials see three rate cuts as reasonable this year.
• Traders raise their bets the BoE will cut the interest rate before the US Fed this year, weighing on the GBP.
• The US ADP Employment Change, the ISM Services PMI, and Fed’s Powell speech will be the highlights on Wednesday.

The GBP/USD pair trades with a negative mild bias around 1.2575 despite the decline of the US Dollar on Wednesday. The major pair remains vulnerable due to slowing UK inflation and a dismal market mood. The Fedspeak on Wednesday will be closely watched by traders, as it might offer some hints about the interest rate trajectory and policy outlook.

Many Fed officials spoke about the monetary policy outlook on Tuesday. Cleveland Fed Bank President Loretta Mester said that she still expects interest rate cuts this year, but ruled out the next policy meeting in May. San Francisco Fed Bank President Mary Daly also anticipates rate cuts this year but not until there’s more evidence that inflation has cooled down. San Francisco Fed President Daly said that three rate cuts this year are a “very reasonable baseline” though nothing is guaranteed. According to the CME FedWatch Tool, investors are now pricing in about a 65% odds of a rate cut by June, down from about 70% after the Fed's March meeting.

On Tuesday, the US February JOLTS Job Openings climbed to 8.756M in February from a downwardly revised 8.748M in January, better than the market estimation. Meanwhile, the Factory Orders improved to 1.4% MoM in February from a 3.8% fall in the previous reading.

On the other hand, traders raise their bets the Bank of England (BoE) will cut the interest rate before the US Fed this year, which exerts some selling pressure on the Pound Sterling (GBP). Additionally, easing UK inflation and a dismal market mood might weigh on the GBP and cap the upside of the GBP/USD pair.

Market players will keep an eye on the US ADP Employment Change, the final S&P Global Composite PMI, and the ISM Services PMI. Also, the Fed's Bowman, Goolsbee, Barr, Kugler, and Powell are set to speak later on Wednesday. If the Fed officials deliver any dovish comments, this could weigh on the Greenback and create a tailwind for the GBP/USD pair in the near term.

• GBP/USD climbs to 1.2573, rebounding amidst rising US Treasury yields and mixed signals from Fed officials.
• US job openings slightly exceed expectations, while Factory Orders show robust growth, impacting Treasury note rates.
• UK manufacturing sector returns to expansion, boosting Sterling ahead of upcoming service sector data.

The Pound Sterling registered solid gains on Tuesday after diving to a one-month low of 1.2539 on Monday as European financial markets were shut off due to a holiday. At the time of writing, the GBP/USD trades at 1.2573, a gain of 0.18%.

GBP/USD bounces back from monthly lows as manufacturing activity improves

US Treasury yields climbed on solid US economic data. The US Bureau of Labor Statistics revealed that job openings increased from 8.745M to 8.756M, above estimates of 8.75M in February. Layoffs ticked up from 1.6M to 1.7M while the quitting rate rose modestly to 3.5M. In other data, Factory Orders expanded by 1.4% MoM in February, a substantial recovery from January’s -3.8% plunge and above forecasts of 1%.

Following the data, the US 10-year Treasury note coupon rose to 4.409%, its highest since November of last year. Conversely, the US Dollar Index (DXY), which tracks the buck's performance against other six currencies, dropped 0.17% to 104.79.

Recently, Federal Reserve officials have crossed the wires. The Cleveland Fed President Loretta Mester expects the Fed could cut rates later this year, yet doesn’t see the first one at the upcoming meeting. She sees bigger monetary policy risks if the Fed cuts too soon, adding that the economic strength of the economy gives the central bank space before easing policy.

Across the pond, S&P Global revealed that Manufacturing activity, as measured by the PMI in the UK, rose from 47.5 to 50.3, exceeding estimates of 49.9. According to the survey, it was the first month of expansion in twenty, thanks to recovering demand.

Ahead in the week, the UK economic docket will feature S&P Global Services PMI. On the US front, traders’ eye Fed speeches, along with the release of the ADP Employment Change report on Wednesday and the ISM Services PMI.

GBP/USD Price Analysis: Technical outlook

The GBP/USD remains downward biased despite posting a recovery. Buyers failed to reclaim the 200-day moving average (DMA) of 1.2580, which could pave the way for a pullback toward the December 13 low of 1.2500. A breach of the latter will expose the November 17 low of 1.2374. On the other hand, if buyers push prices above the 200-DMA, look for a test of 1.2600. Key resistance levels lie at the 100-DMA at 1.2652 and the 50-DMA at 1.2676.

GBP/USD edges off support in low 1.2500s. Economists at Scotiabank analyze the pair’s outlook.

Intraday price action looks mildly positive for the GBP

• GBP/USD struggles to gain ground near 1.2545 on the stronger US Dollar. 
• The US ISM manufacturing data unexpectedly expanded for the first time in nearly 18 months.
• The dovish stance of the Bank of England (BoE) drags the GBP lower against the USD. 

The GBP/USD pair remains on the defensive around 1.2545 during the early Asian session on Tuesday. The US Dollar Index (DXY) rises above the 105.00 mark, and the US Treasury bond yields edges higher sharply overnight following the upbeat US ISM data, which creates a headwind for the GBP/USD pair. 

The US ISM Manufacturing PMI data unexpectedly expanded in March, with the index rising to 50.3 from 47.8 in February, stronger than the expectation of 48.4. The reading registered the highest level since September 2022, and it is the first time manufacturing activity has expanded since October 2022. A reading above 50 indicates that the manufacturing economy is generally expanding, while a reading below 50 signals that factory activity is generally declining. In response to the stronger-than-expected data, the US Dollar (USD) attracts some buyers across the board. 

The dovish stance of the Bank of England (BoE) in its latest monetary policy statement has exerted some selling pressure on the Pound Sterling (GBP). The BoE Governor Andrew Bailey said that market expectations for two or three rate cuts this year are “reasonable,” while adding that the UK central bank is not seeing a lot of sticky persistence. These comments trigger expectations for the BoE to cut interest rates in June and drag the GBP lower against the Greenback. 

Later on Tuesday, the UK Nationwide Housing Prices and S&P Global/CIPS Manufacturing PMI for March are due. Also, Federal Reserve (Fed) officials, including Governor Michelle Bowman, Loretta Mester, John Williams, and Mary Daly, are set to speak on Tuesday. 

• GBP/USD declines as strong US manufacturing activity and pricing pressures fuel speculation of a persistent Fed policy.
• The resilience of the US economy, evidenced by ISM data, contrasts with quiet European markets due to holiday closures.
• Upcoming UK PMI data releases could weigh the GBP/USD as market participants expect further deterioration.

The Pound Sterling slumps in the mid-North American session, as robust US economic data could dent the Federal Reserve’s intentions to cut rates. That underpinned the Greenback while US Treasury yields skyrocketed, a headwind for Cable. The GBP/USD trades at 1.2587, down 0.57%.

Pound Sterling treads water amid strong US Dollar and higher US yields.

A holiday in Europe keeps the financial markets closed. Across the Atlantic, data from the Institute for Supply Management (ISM) revealed that business activity in the US expanded in March for the first time since September 2022, suggesting the economy's resilience. The Manufacturing Purchasing Managers' Index (PMI) reached 50.3, surpassing the consensus of 48.4 and improving upon February's 47.8. Furthermore, the report highlighted an increase in the Prices Paid Index, which was its highest point since August 2022. Given the economy's better-than-expected performance, this resurgence in pricing pressures might hinder the Federal Reserve's inclination to soften its monetary policy.

Earlier, S&P Global announced a slight adjustment to March’s Manufacturing PMI for the United States, finalizing it at 51.9 compared to the initial reading of 52.2, around 13:45 GMT.

Following the data, money market traders slashed the odds for a Federal Reserve’s rate cut in June from around 60% to 56.9%, according to data from the CME FedWatch Tool.

Last week, Fed Chair Jerome Powell commented in a speech at the San Francisco Fed that the US central bank is in no rush to cut rates. Even though last week’s Core Personal Consumption Expenditure (PCE) price index came to a touch softer, the Consumer Price Index (CPI) remains above the 3% threshold. That would keep Fed officials with their hands tied and adhere to the higher for longer mantra.

On Tuesday, the UK economic docket will feature the release of Housing Prices, the BoE Consumer Credit, and the S&P Global Manufacturing PMI.

GBP/USD Price Analysis: Technical outlook

The GBP/USD exchange rate has broken the previous dynamic support level seen at the 200-day moving average (DMA) at 1.2857, opening the door for further losses. If sellers push the exchange rate below 1.2550,  the 1.2500 figure is up next. Otherwise, if the pair edges are higher than the 200-DMA, look for 1.2600 as the next supply zone, ahead of the 100-DMA at 1.2649.

• GBP/USD trades in positive territory around 1.2628 in Monday’s early European session. 
• The pair keeps the bearish outlook below the key EMA; RSI indicator lies below the 50 midlines. 
• The first upside barrier is seen in the 1.2640–1.2645 region; 1.2610 acts as an initial support level. 

The GBP/USD pair holds positive ground near 1.2628, snapping the two-day losing streak on Monday. The modest recovery of the major pair is backed by the dovish comments from Federal Reserve (Fed) Chairman Jerome Powell. The Fed’s Powell stated on Friday that recent US inflation data was in line with expectations and that the Fed's goal for the interest rate this year remained unchanged. The US central bank maintains projections of three rate cuts this year, and traders anticipate the first rate cuts will begin in the June meeting.

According to the four-hour chart, GBP/USD maintains the bearish outlook unchanged as the major pair is below the key 50-period and 100-period Exponential Moving Average (EMA) on the four-hour chart. Additionally, the downward momentum is supported by the Relative Strength Index (RSI), which lies below the 50 midlines, suggesting the path of least resistance level is to the downside. 

The first upside target for GBP/USD is seen near the confluence of the upper boundary of the Bollinger Band and the 50-period EMA at the 1.2640–1.2645 zone. A decisive break above the mentioned level will expose the 100-period EMA at 1.2671. Further north, the next hurdle is located at a high of March 18 at 1.2746, and finally the 1.2800 psychological level. 

On the flip side, the lower limit of the Bollinger Band at 1.2610 acts as an initial support level for the major pair. Any follow-through selling will see a rally to a low of March 22 at 1.2575. The contention level to watch is a low of February 14 at 1.2535, and finally at the 1.2500 round figure. 

GBP/USD four-hour chart

• GBP/USD remains in the positive territory after trimming daily gains on Monday.
• US ISM Manufacturing PMI is expected to improve to 48.4 in March, from 47.8 prior.
• GBP could face a struggle due to the speculation of the BoE initiating three quarter-point rate cuts in 2024.

GBP/USD trims intraday gains, remaining higher around 1.2530 during the Asian hours on Monday. US Dollar (USD) recovers its daily losses on risk aversion ahead of ISM Manufacturing Purchasing Managers Index (PMI) data from the United States (US) scheduled to be released later in the North American session, capping the advance of the GBP/USD pair.

However, the US Dollar Index (DXY) encountered difficulties following dovish comments from Federal Reserve (Fed) Chairman Jerome Powell on Friday. Powell remarked that recent US inflation data was in line with expectations, supporting the Fed's position on potential interest rate cuts throughout 2024. Fed officials maintain projections of three rate cuts this year. Market participants anticipate the first of these cuts to materialize at the June meeting.

In February, US Core Personal Consumption Expenditures (PCE) increased by 0.3% month-over-month (MoM), aligning with market expectations and slightly lower than January's 0.5%. The annual index rose by 2.8%, meeting expectations and slightly lower than the previous increase of 2.9%. US Headline PCE (MoM) saw a 0.3% increase, slightly below expectations and lower than the previous month's 0.4% rise. Year-over-year PCE increased by 2.5%, meeting expectations.

On the other side, the anticipation of the Bank of England (BoE) initiating three quarter-point rate reductions in 2024 is putting pressure on the Pound Sterling (GBP). This pressure is further compounded by recent weaker economic data, indicating that the UK economy slipped into recession in the latter half of 2023. BoE Governor Andrew Bailey's statement suggesting that interest rate cuts will be considered in future policy meetings has added to this pressure.

With limited high-impact data forthcoming from the United Kingdom (UK), traders are likely to gauge the UK economic landscape by closely monitoring indicators such as Nationwide Housing Prices, S&P Global PMI, and Halifax House Prices data set to be released during the week.

• The US PCE Price Index, rose to 2.5% YoY and 0.3% MoM in February, in line with market expectations.
• The core PCE also met expectations.
• With inflation indicators in sight, investors will eye next week's employment data, as its influence can potentially postpone any rate cut decision.

In Friday's session, GBP/USD is being traded around 1.2640, registering a variation of 0.14% as investors digest the US February Personal Consumption Expenditures (PCE) figures.

Inflation in the US increased slightly to 2.5% annually in February, as per the PCE Price Index, which the Fed prefers for tracking inflation. This was a minor rise from January's 2.4% and met expectations. The index rose by 0.3% from the previous month, a tad lower than the 0.4% forecast. Core PCE, excluding food and energy, also rose by 2.8% annually, aligning with predictions, and showed a 0.3% monthly increase. With January's core PCE figures revised up, ongoing inflation may lead the Federal Reserve (Fed) to maintain higher interest rates. Upcoming employment data will be key for future policy decisions, potentially affecting the timing and extent of rate cuts.

In line with that, hot employment data may push Fed policymakers to delay cuts beyond June and post just two instead of the three forecasted cuts for 2024 which could eventually benefit the US Dollar.

GBP/USD technical analysis

On the daily chart, the Relative Strength Index (RSI) for the GBP/USD pair is lingering in the negative territory, currently reading at 44. The prevalence of the RSI within the negative area indicates stronger selling momentum. Meanwhile, the flat red histogram of the Moving Average Convergence Divergence (MACD) implies fading bearish momentum but also serves as a caution to bulls.

On a larger scale, the pair is also below the 20 and 100-day Simple Moving Averages (SMAs), but above the 200-day SMA. This suggests that despite the current conditions, the bulls continue to exhibit strength in the overall trend.

• GBP/USD drifts lower to 1.2620 in Friday’s early European trading hours. 
• The bearish outlook of the pair remains intact above the key EMA; RSI indicator supports the downward momentum. 
• The first upside barrier is seen in the 1.2645–1.2650 region; the 1.2600–1.2605 zone acts as an initial support level. 

The GBP/USD pair trades on a weaker note around 1.2620 during the early European session on Friday. The decline of Pound Sterling (GBP) is backed by the growing speculation that the Bank of England (BoE) will begin the rate-cut cycle this year. Markets are fully pricing in the first rate cut in August, with a total of nearly three quarter-point interest rate cuts this year.

Technically, GBP/USD keeps the bearish vibe unchanged as the major pair is below the key 50- and 100-period Exponential Moving Average (EMA) on the four-hour chart. Furthermore, the Relative Strength Index (RSI) lies below the 50 midlines, suggesting the downward momentum of the pair and the further decline look favorable. 

The immediate resistance level for GBP/USD is seen in the 1.2645–1.2650 region, representing the confluence of the upper boundary of the Bollinger Band and the 50-period EMA. Any follow-through buying above the latter will expose the 100-period EMA at 1.2677. The additional upside filter to watch is a high of March 18 at 1.2746, en route to the 1.2800 psychological round mark.

On the downside, the lower limit of the Bollinger Band at the 1.2600–1.2605 zone acts as an initial support level for the major pair. A decisive break below this level will pave the way to a low of March 22 at 1.2575. The next downside target is located at a low of February 14 at 1.2535, and finally at the 1.2500 round figure. 

GBP/USD four-hour chart

• GBP/USD trades on a flat note near 1.2622 in Friday’s early Asian session.  
• The UK GDP contracted by 0.3% QoQ in Q4 2023, unchanged from preliminary estimates. 
• The final US Q4 GDP expanded 3.4% against the previous estimate of 3.2%, better than expected. 
• The US February Core PCE will be the highlight on Friday.

The GBP/USD pair trades sideways around 1.2622 during the early Asian session on Friday. The market is likely to be mute in light trading on Good Friday. Later in the day, the US Core Personal Consumption Expenditures (PCE) Price Index will be released. The Fed’s preferred inflation gauge is estimated to remain stable at 2.8% YoY.

The Pound Sterling (GBP) remains under some selling pressure after the economic data showed that the UK economy went into recession in the second half of 2023. The nation’s Gross Domestic Product (GDP) contracted by 0.3% QoQ in the fourth quarter, unchanged from preliminary estimates. However, the GDP numbers did not impact expectations for monetary policy, as investors already factored in a mild recession late last year. 

Additionally, the higher speculation that the Bank of England (BoE) will begin three quarter-point reductions in rates this year undermines the GBP. The BoE Governor Andrew Bailey said that interest rate cuts will be ‘in play’ at future BoE policy meetings.

On the other hand, the US economy remained robust in the fourth quarter of last year. This, in turn, provides some support to the Greenback and drags the GBP/USD pair lower. The final US Q4 GDP came in better than expected, growing 3.4% from the previous 3.2% estimate. Meanwhile, the weekly Initial Jobless Claims for the week ended March 22 were at 210K from the previous reading of 212K. Finally, the March Michigan Consumer Sentiment Index was upwardly revised to 79.4, above the preliminary estimate of 76.5. 

• The Pound finds support above 1.2580 but it remains unable to extend gains beyond 1.2670.
• Soft UK data and hawkish comments from Fed speakers are weighing on the Sterling.
• The USD has failed to capitalize on better-than-expected US GDP and Jobless Claims figures

The Sterling found support at the 1.2580 area earlier today, before bouncing up, favoured by a somewhat softer US Dollar during Thursday’s US Session. The pair, however, remains capped below 1.2665, which leaves the broader bearish trend unchanged.

The pair has been trading back and forth within a 100-pip horizontal channel, consolidating losses following a decline from Year-To-Date highs near 1.2900 in early March.

Soft UK data and hawkish Fedspeak weighing on the GBP

UK macroeconomic figures have weighed on the Sterling. The quarterly GDP revealed that the country entered recession in the last months of 2023 and inflation has cooled faster than expected, boosting hopes that the BoE could start cutting rates at the same time as the Fed, if not earlier.

In the US, Fed Governor Waller suggested that the Fed might keep interest rates higher for longer, which provided a fresh boost to the US Dollar. Investors are now looking at Friday’s PCE Prices Index to reassess the chances  of a June rate cut

Macroeconomic data released on Thursday revealed that the US economy grew at a faster-than-expected pace in the fourth quarter while Weekly Jobless Claims declined, adding to the evidence of the strong US labour market. The impact on the US Dollar, however, has been minor.

GBP/USD Technical levels to watch

GBP/USD holds support below 1.2600. Economists at Scotiabank analyze the pair’s outlook.

Cable based around 1.2590/1.2600

• GBP/USD trades on a softer note below the mid-1.2600s on Thursday ahead of UK GDP growth numbers data. 
• The pair keeps the bearish vibe below the key EMA; RSI indicator holds below the 50 midlines. 
• The immediate resistance level will emerge at 1.2655; the initial support level is located at the 1.2600–1.2605 zone.

The GBP/USD pair remains on the defensive around 1.2630 on Thursday during the early European trading hours. The hawkish tone from Federal Reserve (Fed) Governor Christopher Waller early Thursday has lifted the US Dollar (USD) broadly, which creates a headwind for the GBP/USD pair. 

The Fed’s Waller said the US central bank is in no rush to cut the benchmark rate and may need to “maintain the current rate target for longer than expected. Traders await the final UK Gross Domestic Product (GDP) growth number for Q4 on Thursday, which is projected to contract 0.3% QoQ in Q4. 

From a technical perspective, GBP/USD maintains the bearish outlook unchanged as the major pair holds below the key 100-period Exponential Moving Average (EMA) on the four-hour chart. The downward momentum is confirmed by the Relative Strength Index (RSI), which lies below the 50 midlines, supporting the sellers for the time being.

The first upside barrier for GBP/USD will emerge near the upper boundary of the Bollinger Band at 1.2655. A break above the latter will expose the 100-period EMA at 1.2685. Further north, the next hurdle is seen near a high of March 18 at 1.2746, followed by the psychological level of 1.2800. 

On the flip side, the initial support level of the major pair is located near the lower limit of the Bollinger Band at the 1.2600-1.2605 region. A breach of this level will pave the way to a low of March 22 at 1.2575. The next contention level to watch is a low of February 14 at 1.2535, en route to the 1.2500 round figure. 

GBP/USD four-hour chart

• GBP/USD remains under pressure around 1.2614 following hawkish comments from Fed’s official on Thursday. 
• Fed’s Waller said there is no rush to cut the rate and may need to maintain the current rate for longer than expected.
• The dovish comments from BoE’s Bailey about rate cuts weigh on GBP. 
• Investors will focus on the BoE's Mann speech, final UK Q4 GDP, and US GDP annualized data, due on Thursday. 

The GBP/USD pair attracts some sellers to 1.2614 after retreating from a daily high of 1.2640 during the early Asian session on Thursday. The sell-off of the major pair is backed by recent hawkish comments from US Federal Reserve (Fed) official, affirming the higher-for-longer stance and no need to rush the rate cuts.

Early Wednesday, Fed Governor Christopher Waller said that the US central bank is in no rush to cut the benchmark rate and may need to “maintain the current rate target for longer than expected.” Waller emphasized that the Fed is in no rush to cut the policy rate as it’s prudent to hold its restrictive stance for longer than previously expected to bring down inflation to the 2% target. His hawkish comments boost the Greenback higher to 104.45 and weigh on the major pair. 

On the other hand, the Bank of England (BoE) held the interest rate unchanged at 5.25% for the fifth meeting in a row last week. The UK central bank turned dovish on the interest rate outlook, and this has exerted some selling pressure on the Pound Sterling (GBP). The BoE Governor Andrew Bailey said that interest rate cuts will be ‘in play’ at future BoE policy meetings.

Market players will monitor the speech by BoE's C. Mann and the final UK Gross Domestic Product (GDP) growth numbers for Q4 on Thursday. Any dovish comments from the BoE policymaker or the weaker-than-expected GDP number might extend the selling pressure on the GBP. On the US docket, the GDP annualized number, the weekly Initial Jobless Claims and the Michigan Consumer Sentiment Index will be due later in the day. 

• GBP/USD edges up to 1.2632, navigating through thin liquidity and a light economic calendar on both sides of the Atlantic.
• US Durable Goods Orders exceed expectations, while consumer concerns over inflation temper consumer confidence.
• Market focus on Fed Governor Waller's upcoming speech and core PCE inflation data for potential rate cut insights.

The Pound Sterling clings to gains of 0.05% against the US Dollar after hitting a daily low of 1.2605. Thin liquidity conditions prevail in the financial markets amid a shortened week in observance of Good Friday. At the time of writing, the GBP/USD trades at 1.2632.

GBP/USD maintains slight gains in subdued trading, with investors awaiting key speeches and inflation data

The economic docket on both sides of the Atlantic remains scarce, though the latest data from the United States (US) witnessed Durable Goods Orders rising 1.4% in February, above estimates of 1.1%. Other data showed that US consumer confidence missed estimates of 107, coming at 104.7 in March. Dana M. Peterson, Chief Economist at The Conference Board, commented, “Consumers remained concerned with elevated price levels, which predominated write-in responses.”

Later, the Fed Governor Christopher Waller is expected to cross newswires at around 22:00 GMT. In Waller’s last speech, he said the Fed is in no rush to cut rates, which has sponsored a repricing of a less dovish Fed, as shown by the CME FedWatch Tool. Money markets see 70% odds for a 25 basis points interest rate cut by the Fed in June.

Aside from this, GBP/USD traders are eyeing the release  of the Fed’s preferred measure of inflation, the Core Personal Consumption Expenditure (PCE) price index. If inflation edges lower, that could fuel rate cut speculations of the Fed, but the figures must be taken with a pinch of salt as Fed Chair Jerome Powell would speak at 15:30 GMT.

Across the pond, traders are eyeing the release of the latest Gross Domestic Product (GDP) figures for Q4 on Thursday, along wth the Current Account numbers for the same period.

GBP/USD Price Analysis: Technical outlook

The GBP/USD pair has printed back-to-back spinning tops candles, suggesting indecision amongst investors. On the upside, the 100-day moving average (DMA) at 1.2639 caps the rallies of the Sterling, while the 200-DMA at 1.2589 acts as strong dynamic support for buyers. For a bullish resumption, a breach of the 100-DMA could expose the 50-DMA at 1.2678 before testing 1.2700. On the flip side, if sellers reclaim 1.2600 and the 200-DMA, look for a test of 1.2505, the November 14 high turned support.

GBP/USD trades flat on the day after failing to hold gains to the upper 1.2600s. Economists at Scotiabank analyze the pair’s outlook.

Support is 1.2600, resistance is 1.2665

See: USD to remain resilient, downside risks to the GBP in the months ahead – HSBC

• GBP/USD could break the psychological support of the 1.2600 level to revisit March’s low at 1.2575.
• Technical analysis suggests the bearish sentiment to test the major support of the 1.2550 level.
• The resistance zone could be found around the 23.6% Fibonacci retracement level of 1.2650 level and the nine-day EMA at 1.2668.

GBP/USD extends its losses for the second consecutive day, depreciating to near 1.2620 during the Asian session on Wednesday. The pair could test the psychological support level of 1.2600. If this level is breached, it could prompt the pair to revisit March’s low at 1.2575.

The technical analysis of the GBP/USD pair suggests a bearish trend. The 14-day Relative Strength Index (RSI) is positioned below 50, indicating a bearish sentiment. Additionally, the Moving Average Convergence Divergence (MACD) confirms the bearish trend, as the MACD line is below the centerline and exhibits divergence below the signal line.

The bearish sentiment could influence the GBP/USD pair to test the major support of 1.2550 level, followed by February’s low of 1.2518.

On the upside, the GBP/USD pair could meet the major barrier at 23.6% Fibonacci retracement level of 1.2650 level. A breakthrough above this barrier could exert upward support for the pair to test the nine-day Exponential Moving Average (EMA) at 1.2668.

If the GBP/USD pair surpasses the latter, it could approach the psychological level of 1.2700.

GBP/USD: Daily Chart

• GBP/USD trades softer around 1.2630 in Wednesday’s early Asian session. 
• The US Durable Goods Orders rose 1.4% in February against a 6.9% fall in January, better than expected. 
• BoE’s Mann dampened expectations for large interest rate cuts this year.

The GBP/USD pair edges lower to 1.2620 during the early Asian trading hours on Wednesday. The major pair remains capped under the key 100-day Exponential Moving Average (EMA). Many Federal Reserve (Fed) policymakers stick to their path of interest-rate cuts amid the bumpy road to inflation and expect to cut rates three times in 2024, which might weigh on the Greenback. On Thursday, the US and UK Gross Domestic Product (GDP) data will be released. 

Despite recent monthly inflation increases, Fed Chair Jerome Powell said last week that pricing pressures would continue to ease and that it may be appropriate to cut interest rates later this year. The majority of US central bank officials expect to cut rates three times in 2024. These remarks push the Fed's stance more dovish and drag the US Dollar (USD) lower in recent sessions. 

About the data, the US Conference Board’s Consumer Confidence fell to 104.7 from a downwardly revised 104.8 in February. Meanwhile, the Durable Goods Orders for February came in better than market expectations, rising 1.4% in February from a 6.9% fall in January. The US Dollar Index (DXY) consolidates around 104.30 following the release of US economic data as traders await fresh clues from the US February Personal Consumption Expenditures Price Index (PCE) data on Friday.

On the other hand, the Bank of England's (BoE) Catherine Mann, one of the BOE's most hawkish policymakers, warned that financial markets are expecting too many interest rate cuts this year and that the BoE is unlikely to move before the US Fed. "I think they're pricing in too many cuts," Mann said. Traders will take more cues from UK GDP growth numbers on Thursday, which are estimated to contract 0.3% QoQ and 0.2% YoY in the fourth quarter. In the case of stronger-than-expected GDP growth number data, the Pound Sterling (GBP) could gain traction and act as a tailwind for the GBP/USD pair.