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GBP/USD edges lower as renewed USD dip-buying emerges ahead of the US PCE Price Index release.
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Diverging policy expectations between the Fed and BoE may help cushion the downside for the pair.
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Market participants may remain cautious and hold off on new positions until the US inflation data is published.
The GBP/USD pair has come under renewed selling pressure after rebounding from the weekly low near 1.3415 in the previous session. Currently trading around the 1.3470–1.3475 zone, the pair is down approximately 0.15% on the day. However, downside momentum appears limited as traders exercise caution ahead of the release of the US Personal Consumption Expenditures (PCE) Price Index.
Ahead of this key inflation data, the US Dollar has regained modest strength on the back of position adjustments following Wednesday’s sharp reversal from a one-week high. This mild USD uptick has weighed on GBP/USD, although broader factors may cap further losses. Expectations of potential Fed rate cuts in 2025 and ongoing US fiscal concerns could limit the greenback’s upside. Simultaneously, speculation that the Bank of England will hold rates steady at its upcoming June 18 meeting and delay any easing could lend support to the Pound.
From a technical standpoint, short-term oscillators on the 4-hour chart are starting to show bearish momentum, suggesting the potential for additional intraday weakness. Nonetheless, daily indicators remain firmly in bullish territory, supported by the recent rebound off the 38.2% Fibonacci retracement level of the latest rally from May's low. This implies that dips toward the 1.3425–1.3415 area could be viewed as buying opportunities. A break below this zone, however, may trigger further technical selling and open the door for a decline toward the 1.3375–1.3370 support area—a confluence of the 100-day SMA and the 50% Fibo retracement level. This region is likely to serve as a strong pivot; a decisive move below it would invalidate the near-term bullish setup and shift momentum in favor of sellers, potentially leading to a drop toward 1.3300 (61.8% Fibo level).
On the upside, bulls will likely look for a sustained move above the key psychological barrier at 1.3500 before committing to new long positions. A confirmed breakout above this level could drive GBP/USD toward resistance at 1.3540–1.3545, and possibly retest the recent peak around 1.3600—the highest level since February 2022. A break beyond that would signal a continuation of the prevailing two-month uptrend and could accelerate bullish momentum further.
GBP/USD 4-hour chart
