**FxWirePro: GBP/USD Bulls Struggle as Upside Momentum Fades on Mixed Data**
*By FxWirePro News Desk. Article inspired by original reporting on EconoTimes.*
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Currency traders and macroeconomic analysts have been closely monitoring GBP/USD, one of the world’s most traded currency pairs, amid ongoing macroeconomic uncertainties. Over recent sessions, GBP/USD bulls have faced mounting obstacles, as upside momentum has started to wither. A wave of fresh fundamental data and oscillating risk sentiment have eroded previously undergirding bullish support, leaving the British pound exposed to mounting headwinds. This in-depth analysis examines the underlying drivers, technicals, and broader market context shaping the current trajectory of GBP/USD.
## Overview: Mixed Data Undercuts Bullish Sentiment
In the wake of several moderate rallies, the British pound has encountered distinct challenges to sustaining upward momentum against the US dollar. Despite a series of attempts by GBP/USD to forge past critical resistance zones, lackluster economic data and heightened expectations around the US Federal Reserve’s policy trajectory have dampened the appetite for sterling.
While UK economic releases recently revealed pockets of resilience such as improving labor market numbers and sticky inflation, the broader picture has been clouded by lingering uncertainties tied to the Bank of England’s (BoE) monetary strategy and ambiguous growth prospects. As a result, short-term bullish sentiment has waned.
## Recent GBP/USD Performance
– Following an advance toward the psychological 1.2700 handle, GBP/USD has repeatedly failed to gain traction at higher levels.
– Momentum indicators reflect waning buying pressure, amplifying fears of a potential correction.
– Technicals show a lack of conviction for sustained upside movement, even when intra-day rebounds have occurred.
## Key Data Releases Influencing Sterling
### 1. UK Macro Data Mixed
Several datasets have painted a mixed portrait of the UK economy, influencing the outlook for the pound:
– **Inflation:** The Consumer Price Index remains above the BoE’s 2 percent target, fueling speculation of rate hikes but weighing on real income and consumption.
– **Labor Market:** Unemployment ticked down slightly, but wage growth has moderated, reducing expectations for continued tightness in the labor market.
– **GDP Growth:** Economic growth prints have been tepid, with the UK showing only marginal quarterly expansion, raising concerns over underlying momentum and output gaps.
### 2. US Economic Strength and Fed Policy
The US economy continues to outpace much of the developed world, reinforcing dollar resilience:
– **Robust Jobs Data:** Recent Non-Farm Payroll (NFP) reports beat market estimates, supporting the narrative of a resilient labor market.
– **Strong Retail Sales:** Consumer spending remains buoyant, helping offset recessionary fears.
– **Hawkish Fed Rhetoric:** Federal Reserve officials have maintained a cautious tone regarding inflation, suggesting further rate hikes could still be in play should inflationary pressures re-emerge. This hawkish stance contrasts with signals from the BoE, which has started to hint at pausing or even easing.
## Technical Analysis: GBP/USD Exposed to Downside Risks
Traders and investors have been watching a number of technical signals for clues about future price action in GBP/USD:
– **RSI (Relative Strength Index):** The daily RSI has failed to climb convincingly above 50, underscoring an absence of strong bullish momentum.
– **Moving Averages:** GBP/USD remains capped under the 200-day simple moving average, a critical resistance level for trend determination.
– **Support/Resistance Levels:**
– Immediate resistance is identified near 1.2750; a sustained move above could target 1.2820.
– Initial support is seen at 1.2650, followed by 1.2600 and then the more critical 1.2540 level, which, if breached, could open the door for a deeper retracement.
## Market Sentiment and Positioning
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