The British pound has been losing ground against the US dollar in recent weeks, as the Fed signaled a potential policy shift amid higher inflation expectations.
The GBP/USD pair is now hovering around 1.2700, just below a key resistance level at 1.2900, with a mixed market sentiment.
The USD still benefits from the higher inflation expectations and the possibility that the Fed may reduce its asset purchases.
Recently, The GBP/USD pair managed to climb above 1.2600 and tried to advance toward 1.2900 and the next target around 1.3100, but it did not have enough bullish momentum to maintain it.
Moreover, a short-term bearish pullback was executed towards 1.2600 where significant bullish rejection emerged. That's why, further bullish advancement should be expected toward 1.3000 and 1.3100 if sufficient bullish momentum is maintained
However, If the pair closes below the price level of 1.2500 on a H4 candlestick, it may continue to fall toward 1.2200 and 1.2000.
