Dear Traders!
The GBP/USD pair edged lower during the Asian session on Wednesday, eroding part of the strong rally from the previous day that pushed it to a more than four-month high. The spot price is currently trading around 1.2935, although the decline shows no clear signs of bearish momentum.
From a technical perspective, last week's sustained breakout above the 34 & 89 EMA is significant and is seen as a key trigger for buyers. Therefore, any further pullback could still be considered a buying opportunity.
The upcoming U.S. Consumer Price Index (CPI) report will play a crucial role in shaping market expectations regarding the Federal Reserve’s (Fed) interest rate cut trajectory. This will, in turn, influence demand for the U.S. Dollar (USD) and provide fresh momentum for GBP/USD. Meanwhile, some pre-data positioning has helped the USD recover part of its previous day’s losses—its lowest level since mid-October—acting as a headwind for the currency pair.
However, any meaningful appreciation of the USD still appears elusive as the Federal Reserve increasingly acknowledges multiple rate cuts this year, driven by concerns over a slowdown in economic activity due to restrictive policies. Additionally, expectations that the Bank of England (BoE) may cut rates at a slower pace than other central banks, including the Fed, could support the British Pound (GBP) and provide a floor for GBP/USD.
The GBP/USD pair edged lower during the Asian session on Wednesday, eroding part of the strong rally from the previous day that pushed it to a more than four-month high. The spot price is currently trading around 1.2935, although the decline shows no clear signs of bearish momentum.
From a technical perspective, last week's sustained breakout above the 34 & 89 EMA is significant and is seen as a key trigger for buyers. Therefore, any further pullback could still be considered a buying opportunity.
The upcoming U.S. Consumer Price Index (CPI) report will play a crucial role in shaping market expectations regarding the Federal Reserve’s (Fed) interest rate cut trajectory. This will, in turn, influence demand for the U.S. Dollar (USD) and provide fresh momentum for GBP/USD. Meanwhile, some pre-data positioning has helped the USD recover part of its previous day’s losses—its lowest level since mid-October—acting as a headwind for the currency pair.
However, any meaningful appreciation of the USD still appears elusive as the Federal Reserve increasingly acknowledges multiple rate cuts this year, driven by concerns over a slowdown in economic activity due to restrictive policies. Additionally, expectations that the Bank of England (BoE) may cut rates at a slower pace than other central banks, including the Fed, could support the British Pound (GBP) and provide a floor for GBP/USD.
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