FX.co ★ GBP/USD

The GBP/USD pair has recently caught the attention of astute investors, marking three consecutive days of heightened buyer interest. This surge follows a notable rebound below 1.2600, representing a one-month low. Currently hovering just above the 1.2700 round-figure mark, spot prices find support in diminishing speculations surrounding an imminent interest rate cut by the Bank of England (BoE). Fundamentals of the GBP/USD: The US Dollar (USD) experienced a modest retreat, attributed to profit-taking after its recent ascent to the highest level since December 13. This downturn in the USD proves to be an additional catalyst, acting as a favourable tailwind for the GBP/USD pair. Despite this, investors cautiously recalibrate their expectations for a March interest rate cut by the Federal Reserve (Fed) in light of encouraging US Retail Sales figures. The resulting boost in US Treasury bond yields is anticipated to restrain any significant USD downturn, dissuading traders from adopting aggressive bullish positions on the currency pair. Daily Time Frame Technical Outlook: A meticulous examination of the GBP/USD daily chart reveals a nuanced scenario that leans towards a neutral to downward bias, even as Wednesday's price action hints at a 'bullish piercing' pattern, suggesting potential upward movement. However, with crucial UK data behind us, the path forward may involve a challenge to the 50-day moving average at 1.2698, situated just below the critical 1.2700 level. Conversely, if buyers propel the pair above 1.2700, a neutral bias may emerge, creating an opportunity for a testing ground around 1.2800.

Persisting bearish sentiments surround the GBP/USD pair as it remains below the 50- and 100-hour Exponential Moving Averages (EMA) on the four-hour chart. Notably, the 50-hour EMA teeters on the brink of crossing beneath the 100-hour EMA, a potential precursor to a Bear Cross. Such a decisive crossover on the four-hour chart would affirm that GBP/USD's path of least resistance points downward.