**GBP/USD: Pound Seeks to Reclaim 100-Day Moving Average — This Week’s Data Might Help**
*Original reporting by Fawad Razaqzada, TradingView*
The British pound (GBP) finds itself at a technical crossroads against the US dollar (USD), as currency traders watch whether GBP/USD can reclaim its 100-day simple moving average (SMA) in the coming days. After a period of downside pressure and volatility driven by US macroeconomic resilience and Bank of England caution, this week’s data releases may offer the spark the pound needs to reverse its fortunes.
## GBP/USD Technical Picture
The 100-day moving average, a well-regarded technical indicator used by traders to gauge medium-term trend direction, has been acting as a resistance barrier for GBP/USD in recent weeks. The pair’s recent inability to convincingly break above this level has raised doubts about sustained bullish momentum in the pound, suggesting the potential for further consolidation or renewed declines unless fresh catalysts emerge.
• **Current Technical Status:** GBP/USD is trading below the 100-day SMA, having failed to reclaim it over the last couple of weeks. The bearish undertone persists as long as the pair remains capped by this technical hurdle.
• **Support and Resistance Levels:** Immediate resistance is around 1.2760, where the 100-day SMA is currently located. Should bulls find upward momentum, the next significant resistance is near 1.2820, while key support sits at the 1.2660 and 1.2600 levels.
**Chart patterns suggest indecision, with traders awaiting decisive data before making directional bets.**
## Macro Backdrop: US Dollar Strength and UK Data Disappointment
Recent USD strength has been driven by persistently strong US economic data, which has pushed bond yields higher and forced market participants to reassess when the Federal Reserve might begin cutting rates. Conversely, UK economic data has maintained a tone of caution, with the Bank of England projecting a more measured approach to monetary easing.
### Drivers of Recent USD Strength:
• **Robust US Jobs Market:** Nonfarm payrolls have consistently surprised to the upside, keeping wage pressures in focus.
• **US Inflation Stubbornness:** Progress on disinflation has been slower than anticipated, with recent CPI and PCE readings indicating underlying price persistence.
• **Fed Rate Cut Expectations:** Markets have steadily pushed out expectations for the first Federal Reserve rate cut, now priced in for later in 2024.
These macroeconomic divergences have given the greenback an edge over the pound, with traders pivoting away from currencies perceived as closer to policy easing cycles.
### UK Macro Signals Mixed:
While the UK has managed to avoid recession, growth has been tepid. Headline inflation continues to fall, but underlying price pressures from services and wage growth persist, prompting caution within the Bank of England’s policy committee. Governor Andrew Bailey has signaled that while rate cuts are being contemplated, the bank is not in a hurry, referencing persistent services inflation and steady wage growth as causes for vigilance.
• **UK GDP Growth:** Recent GDP data have disappointed investors hoping for a stronger rebound.
• **Inflation Trends:** UK Consumer Price Index (CPI) growth has eased, but services inflation remains sticky.
• **Wage Growth:** Nominal wage growth has slowed from its peaks but is still running above levels consistent with the Bank’s inflation target.
## Event Risk This Week: Data That Could Move GBP/USD
This week brings several data releases that could set the tone for GBP/USD. Currency traders should watch the following closely:
### From the UK:
– **Labour Market Report (Tuesday, June 11):**
– Market participants will scrutinize wage growth and employment numbers. Signs of easing wage pressure or higher unemployment could raise expectations for earlier BoE action and weigh on the pound. Conversely, robust wage and jobs figures may limit dovish bets.
– **Monthly GDP (Wednesday, June 12):**
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