GBP/USD Price Prediction: Consolidates below 1.3100 and YTD peak, bullish potential intact

• GBP/USD bulls turn cautious amid the emergence of some USD buying on Thursday.
• The divergent BoE-Fed policy expectations might continue to lend support to the pair. 
• The technical setup warrants caution for bulls and before positioning for further gains.

The GBP/USD pair oscillates in a narrow band during the Asian session on Thursday and remains within striking distance of its highest level since July 2023, around the 1.3120 area touched the previous day. Spot prices currently trade around the 1.3085 region, nearly unchanged for the day, as traders now look to the flash PMIs from the UK and the US for short-term opportunities. 

In the meantime, a modest uptick in the US Treasury bond yields assists the US Dollar (USD) in recovering a bit from the YTD low touched on Wednesday. This, in turn, is seen as a key factor acting as a headwind for the GBP/USD pair, though diminishing odds for another interest rate cut by the Bank of England (BoE) in September lend some support. Furthermore, increasing bets for a more aggressive policy easing by the Federal Reserve (Fed) should cap gains for the buck and contribute to limiting losses for the currency pair. 

From a technical perspective, this week's sustained breakout through the 1.3000 psychological mark and a subsequent move beyond the previous YTD peak, around the 1.3045 region was seen as a fresh trigger for bullish traders. That said, oscillators on the daily chart have moved on the verge of breaking into the overbought zone, making it prudent to wait for some near-term consolidation or a modest pullback before positioning for any further appreciating move. Nevertheless, the bias remains tilted firmly in favor of bulls. 

Hence, any further slide towards the 1.3050-1.3045 region could be seen as a buying opportunity and remain cushioned near the 1.3000 round figure. The latter should act as a key pivotal point, which if broken decisively might prompt some technical selling and drag the GBP/USD pair to the next relevant support near the 1.2950 area en route to the 1.2900 mark. Failure to defend the said support levels might suggest that spot prices have topped out in the near term and pave the way for some meaningful corrective decline. 

On the flip side, the 1.3120 area, or the YTD peak touched on Wednesday, could act as an immediate hurdle ahead of the 2023 swing high, near the 1.3140 region. Some follow-through buying will reaffirm the constructive setup and set the stage for an extension of the recent strong uptrend witnessed over the two weeks or so. The GBP/USD pair might then aim to surpass the 1.3200 round figure and test the 1.3225-1.3230 resistance zone.

GBP/USD daily chart