The British pound is experiencing a rebound after weeks of losses, as expectations of a US Federal Reserve rate hike diminish. This shift in expectations comes after dovish remarks from key Fed officials, who suggest that the recent rise in yields has lessened the need for further interest rate hikes. As a result, markets are now pricing in a lower chance of a rate hike next month. The focus is now on the upcoming US CPI data and UK GDP data, which will provide further insight into the state of the economies and potentially impact the pound’s performance.
In terms of technical analysis, the GBP/USD pair is showing signs of potential recovery. The recent gains have been supported by strong converged support levels, indicating a potential upward movement. However, a break above the resistance area is needed to confirm a bullish outlook. Similarly, the EUR/GBP pair is still within its established range, with a retreat from a stiff ceiling confirming the ongoing consolidation. The cross is expected to retest the floor of the range before a potential breakthrough.
Meanwhile, the GBP/AUD pair is experiencing a mild recovery, with a break above minor resistance indicating the potential for further gains. The focus is now on the 200-period moving average as a significant barrier to cross. Overall, the pound’s performance against the US dollar, euro, and Australian dollar will continue to be influenced by upcoming economic data and market sentiment.
