GBP/USD advanced for a third straight session on Thursday, climbing back above the 1.3500 handle and recouping much of Monday’s half-percent decline. The pair remains confined within its recent consolidation range, but traders are positioning for a potential upside move ahead of Friday’s US Personal Consumption Expenditures (PCE) Price Index, the Federal Reserve’s preferred inflation gauge.
Technical backdrop supports buyers
Sterling closed above the 100-day Simple Moving Average (SMA), currently near 1.3430, after briefly dipping below that level on Wednesday. Momentum indicators lean positive, with the Relative Strength Index (RSI) on the 4-hour chart holding above 50, signaling reduced selling pressure.
On the topside, resistance is seen at 1.3540 (61.8% Fibonacci retracement of the latest downtrend), followed by 1.3600 (round figure, static resistance) and 1.3640 (78.6% retracement). On the downside, interim support lies at 1.3460 (50% retracement), with stronger levels at 1.3430 (100-day SMA and 200-period SMA on the 4-hour chart) and the 1.3400–1.3390 zone (38.2% retracement).
US data in focus
The dollar struggled to find buyers in Wednesday’s US session, as a mild improvement in risk sentiment limited demand for safe havens. Early Thursday, mixed performance in US equity futures weighed on fresh dollar momentum, allowing GBP/USD to hold its recovery.
Later in the day, attention will turn to the US Bureau of Economic Analysis (BEA), which will publish its second-quarter GDP revision. The initial estimate showed growth at 3% annualized. An upward revision could bolster the greenback and limit sterling’s advance, while a downward revision may trigger renewed USD selling.
Investors will also parse the latest weekly jobless claims report, though trading volumes are likely to remain cautious ahead of Friday’s PCE inflation release, which could set the tone for the Fed’s next policy steps.
Market outlook
GBP/USD has regained footing above 1.3500, but its near-term direction will hinge on whether US data offers fresh support for the dollar or clears the way for a sterling breakout.
