GBP/USD Trades Below 1.3500; Bullish Bias Persists Ahead Of US PCE Data
The GBP/USD pair attracted fresh sellers after the previous day’s decent rebound from the 1.3415 area, or weekly lows amid a modest US Dollar (USD) uptick. The spot price is currently trading around the 1.3475-1.3470 region, down 0.15% for the day, though the downside seems limited as traders might opt to wait for the release of the US Personal Consumption Expenditures (PCE) Price Index.
Ahead of the key data risk, some repositioning trade helped the USD to regain some positive traction after the previous day’s dramatic turnaround from over one-week highs and exerted some pressure on the GBP/USD pair. However, bets that the Federal Reserve (Fed) will lower borrowing costs further in 2025 and US fiscal concerns might keep a lid on the USD. Further, speculations that the Bank of England (BoE) will pause at its next meeting on June 18 and take its time before lowering borrowing costs further should act as a tailwind for the British Pound (GBP).
Meanwhile, oscillators on hourly charts have been gaining some negative traction and support the case for a further intraday decline. However, technical indicators on the daily chart are holding comfortably in the positive territory. Moreover, the overnight bounce from the 38.2% Fibonacci retracement level of the recent up-move from monthly lows favours the GBP/USD bulls. Hence, any subsequent fall might still be seen as a buying opportunity near the 1.3425-1.3415 region, which if broken might prompt some technical selling and pave the way for deeper losses.
The GBP/USD pair might then extend this week’s corrective pullback from the 1.3600 neighbourhood – the highest level since February 2022 – and test the 1.3375-1.3370 confluence. The latter comprises of the 100-period Simple Moving Average (SMA) on the daily chart and the 50% Fibo. level, which in turn, should act as a key pivot point. A convincing break below will negate the near-term constructive outlook and shift the bias in favour of bearish traders, setting the stage for a slide towards the 1.3300 mark, or the 61.8% Fibo. retracement level.
On the flip side, bulls might need to wait for a sustained strength and acceptance above the 1.3500 psychological mark before placing fresh bets. The GBP/USD pair might then climb to the next relevant hurdle near the 1.3540-1.3545 region and then make a fresh attempt to conquer the 1.3600 round-figure mark. Some follow-through buying will be seen as a fresh trigger for bullish traders and set the stage for the resumption of the two-month-old uptrend.
Source: FXStreet
