Pound Sterling recaptures weekly highs as the appeal for risk-perceived assets improves.

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• Pound Sterling recaptures weekly highs as the appeal for risk-perceived assets improves.
• BoE Dhingra’s comments on the interest rate outlook were dovish due to the poor UK economic outlook.
• The preliminary S&P Global/CIPS PMI data remains mixed.

The Pound Sterling (GBP) faces some selling pressure in Thursday’s European session as preliminary PMIs reported by the S&P Global/CIPS for February remain mixed. The Manufacturing PMI at 47.1 was slightly above the prior reading of 47.0 but failed to match expectations of 47.5. The Services PMI was surprisingly unchanged at 54.3 while investors anticipated a decline to 54.1. The Composite PMI was higher at 53.3 against expectations and the former reading of 52.9.

The broader outlook of the Pound Sterling is bullish as the market sentiment remains upbeat. The GBP/USD pair remains upbeat even though Bank of England (BoE) policymaker Swati Dhingra cautioned about downside risks to the United Kingdom economy due to high interest rates.

In her speech at the Market News International Connect event on Wednesday, Dhingra said the demand prospects are “weak and less resilient” than their previous forecasts. She added that higher mortgage costs and rental prices in 2023 shortened households’ pockets, which resulted in weak Retail Sales.

Usually, the Pound Sterling faces foreign outflows when a BoE policymaker warns about holding interest rates higher for a longer duration because it increases the possibility of interest rate cuts.

Meanwhile, investors await February’s preliminary S&P Global PMI data for the United States, which will provide more insights into the economic outlook.

The Pound Sterling extends its winning spell to a third trading session on Thursday. The GBP/USD pair kisses the round-level resistance of 1.2700. The overall trend remains sideways as the pair oscillates in the Descending Triangle pattern formed on the daily time frame.

The aforementioned chart pattern indicates a sharp volatility contraction. The chart formation carries a slightly negative bias due to the establishment of lower highs. The downward-sloping border of the Descending Triangle pattern is plotted from December 28 high at 1.2827, while the horizontal support is placed from December 13 low near 1.2500.

The pair has climbed above the 20-day and 50-day Exponential Moving Averages (EMAs), which are closely trading near 1.2630. Meanwhile, the 14-period Relative Strength Index (RSI) trades in the 40.00-60.00 region, indicating indecisiveness among market participants.

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