- GBP/USD pullbacks from weekly highs, down 0.25%, after testing 1.2700.
- Momentum remains bullish, with potential to test 1.2803 and YTD high at 1.2893.
- Further retracement could challenge support at 1.2634/31 and 50-DMA at 1.2594.
The Pound Sterling erased Wednesday’s gains against the US Dollar as investors pushed the major to new weekly highs on the disinflation evolution in the United States (US). Although investors are pricing 38 basis points rate cuts by the Federal Reserve toward the end of the year, the Greenback is staging a comeback. The GBP/USD trades at 1.2654, down 0.25%.
GBP/USD Price Analysis: Technical outlook
The GBP/USD retreated from weekly highs after briefly testing 1.2700 as buyers failed to decisively crack that level, followed by the April 9 high of 1.2709. Despite that, the uptrend remains intact, with buyers taking a respite.
Momentum, as depicted by the Relative Strength Index (RSI), suggests that bulls are in charge, which could lead to further gains.
If buyers manage to reclaim 1.2709, this could potentially open the door for testing 1.2803, the March 21 high, and even the year-to-date (YTD) high of 1.2893.
On the other hand, a continuation of the retracement witnessed on Thursday could set the scenario to challenge the confluence of the May 3 high and the 100-day moving average (DMA) at around 1.2634/31 before diving toward the 50-DMA at 1.2594.
GBP/USD Price Action – Daily Chart
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