GBP/USD stays firm amid BoE, Fed commentary and US data

• GBP/USD remains flat, influenced by BoE's Megan Greene remarks and multiple Fed officials emphasizing rate patience.
• US economic updates reveal a decrease in Jobless Claims and a surge in the Philadelphia Fed Index but a drop in home sales.
• Shift in rate cut expectations for the Fed impacts currency strength, with only two cuts now anticipated in 2024.

The Pound Sterling is virtually unchanged against the US Dollar in the mid-North American session, amid a scarce economic docket in the United Kingdom (UK) if not interrupted by Bank of England (BoE) member Megan Greene. A slew of Federal Reserve officials keep pounding the mantra of patience when easing rates. The GBP/USD trades at 1.2456, almost flat.

BoE and Fed officials impact Sterling as US data shows mixed signals

Major central bank policymakers are grabbing the headlines, leaving economic data in the background. Therefore, Fed and BoE speakers are driving GBP/USD price action.

Recently, Atlanta’s Fed President Raphael Bostic said inflation is too high, that the US central bank still has a way to go on inflation, and that they won’t be able to reduce rates. Earlier, the New York Fed President John Williams said the Fed is data dependent and emphasized that monetary policy is in a good place, so he isn’t in a rush to cut rates. His baseline doesn’t consider hiking rates but added that the Fed will hike if needed.

On the BoE’s front, Megan Greene commented that inflation data is too high for the institution to consider cutting the Bank Rate. Greene blamed inflation in wages and services as not being “consistent with a sustainable 2% (consumer price) inflation target.”

Elsewhere, the US Department of Labor revealed that for the week ending April 13, US Initial Jobless Claims fell to 212K, below the predicted 215K. Continuing Jobless Claims for the week of April 6 slightly rose to 1.812 million from 1.810 million but were still below the expected 1.818 million.

Other featured data included the Philadelphia Fed Manufacturing Index, which experienced a significant increase, jumping to 15.5, far surpassing the modest expectation of 1.5. In the housing market, US Existing Home Sales declined by 4.3% month-over-month, falling from 4.38 million to 4.19 million, which was also below the anticipated 4.2 million.

Given the fundamental backdrop, traders expect just two rate cuts by the Fed instead of the six projected at the beginning of 2024. That has witnessed flows to the Greenback, which has been up nearly 4.50% so far this year. Hence, if the BoE cuts before the Fed, the GBP/USD pair could be driven lower.

GBP/USD Price Analysis: Technical outlook

The GBP/USD daily chart shifted bearishly once the pair dived below the November 22, 2023, swing low of 1.2448, which exposed the 1.2400 mark. Although buyers had achieved to recover some ground, the latest four candles in the daily chart show that buying pressure is building near the 1.2480/90 area. If the pair dives below 1.2400, further losses remain. The next key support level would be the November 17 daily low at 1.2374, followed by the November 10 low at 1.2187.

On the flip side, if buyers reclaim 1.2500, look for a recovery, but they must conquer the 200-day moving average (DMA) at 1.2575.