The GBPUSD currency pair, currently at 1.26180, is moving back from its highest point of the day but continues to rebound from a low reached two weeks ago. This reversal in trend comes after a two-day decline.

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• GBP/USD retreats from intraday high, extends bounce off fortnight low while snapping two-day downtrend.

The pair currently trades last at 1.26180.

The previous day high was 1.2667 while the previous day low was 1.2591. The daily 38.2% Fib levels comes at 1.262, expected to provide resistance. Similarly, the daily 61.8% fib level is at 1.2638, expected to provide resistance.

GBP/USD reverses from intraday high while paring the first daily gains in three around 1.2620 amid early Friday morning in London. In doing so, the Pound Sterling fails to justify the unimpressive UK Gross Domestic Product (GDP) data while portraying the cautious mood ahead of the key US inflation clues.

Final readings of the UK’s first quarter (Q1) 2023 GDP matches 0.1% QoQ and 0.2% YoY forecasts, per the latest readings.

Earlier in the day, Lloyds Banking Group Plc came out with the upbeat details of the UK business confidence survey as the sentiment index rose to a 13-month high in June. “Lloyds’ Business Barometer showed optimism increasing 9 percentage points to 37%, rebounding from a dip in May. Executives said they were more confident about their own trading prospects and the wider,” said Bloomberg.

On the same line, a jump in the UK’s car production also puts a floor under the GBP/USD price. “The Society of Motor Manufacturers and Traders (SMMT) said on Friday a total of 79,046 cars rolled out of factory gates in the UK last month, an increase of nearly 27% year-over-year. That is still 31.9% lower than the 2019 output levels,” reported Reuters.

Late on Thursday, Bank of England´s monetary policymaker Silvana Tenreyro crossed wires via Reuters while saying, “The more BoE hikes now, the sooner and faster the BoE will later need to cut rates.” Her comments were in contrast with the hawkish Fed talks and dragged the Pound sterling towards refreshing the multi-day low.

That said, Fed Chair Jerome Powell advocated for two more rate hikes in 2023 while Atlanta Federal Reserve President Raphael Bostic flashed mixed signals but stayed hawkish overall.

Apart from the comparatively more hawkish Fed talks, the upbeat US data also raise doubts about the GBP/USD pair’s latest run-up. That said, the final readings of the Gross Domestic Product (GDP) Annualized, mostly known as the Real GDP, grew at the 2.0% rate for the first quarter (Q1) of 2023 versus the 1.3% initial estimation. Further, the US Weekly Initial Jobless Claims slumped to 239K for the week ended on June 23 compared to 265K expected and revised prior. However, the Personal Consumption Expenditure (PCE) Price for Q1 2023 eased to 4.1% QoQ from 4.2% expected and prior whereas the Pending Home Sales slumped to -2.7% MoM for May compared to 0.2% expected and -0.4% prior (revised).

Having witnessed the initial market reaction to the UK data, the GBP/USD pair traders await the US Core Personal Consumption Expenditure (PCE) Price Index for May, also known as the Federal Reserve’s (Fed) favorite inflation gauge. That said, the key inflation gauge is likely to remain static at 0.4% MoM and 4.7% YoY, which in turn may allow the Fed to keep its hawkish bias and recall the GBP/USD bears.

Despite the latest corrective bounce, the GBP/USD pair’s the midweek’s downside break of the key horizontal support, now resistance around 1.2670-90, as well as the bearish MACD signals, keeps the sellers hopeful unless the quote jumps back beyond 1.2690 and cross the 1.2700 threshold.

Hence, the GBP/USD pair is likely to grind lower and suggests a battle with the ascending support line from March 08, around 1.2565, to be imminent.

Technical Levels: Supports and Resistances

GBPUSD currently trading at 1.263 at the time of writing. Pair opened at 1.2615 and is trading with a change of 0.12% % .

The pair is trading below its 20 Daily moving average @ 1.2639, above its 50 Daily moving average @ 1.2544 , above its 100 Daily moving average @ 1.2373 and above its 200 Daily moving average @ 1.2103

The previous day high was 1.2667 while the previous day low was 1.2591. The daily 38.2% Fib levels comes at 1.262, expected to provide resistance. Similarly, the daily 61.8% fib level is at 1.2638, expected to provide resistance.

Note the levels of interest below:

• Pivot support is noted at 1.2582, 1.2549, 1.2506
• Pivot resistance is noted at 1.2657, 1.27, 1.2733

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