- GBP / USD captures some lower levels on Friday and recovers a portion of the previous day’s losses.
- The optimistic economic outlook for the United Kingdom and the expectations of a rate hike from the Bank of England continue to provide some support to the pair.
- Rumors of the Fed’s gradual tightening support the USD and could limit gains ahead of the US NFP report.
The pair GBP/USD has managed to bounce around 40-45 pips from the nearly three-week lows touched earlier in the day, trading around the region of 1.4120 during the European session on Friday.
The pair has once again shown some resistance below the round 1.4100 level and has captured some buying at lower levels on the last trading day of the week. The pound sterling has remained supported by the optimistic outlook for the UK’s economic recovery from the pandemic, bolstered by the gradual relaxation of lockdown measures. It is worth reporting that the British government is ready to go ahead with its plan to completely end the restrictions from June 21.
Apart from this, signs that the Bank of England may raise rates in the coming year They have acted as a tailwind for the British pound. Bank of England lawmaker Gertjan Vlieghe indicated last week that it is likely that the central bank raises rates earlier if the economy recovers faster than expected. That said, a modest strength in the US dollar could prevent bulls from opening aggressive positions and limiting GBP / USD gains.
The optimistic US macroeconomic statements of the Thursday they indicated that the US recovery is gaining momentum. Stronger data further fueled speculation that the Fed could advance the timeline to reduce its bond purchases. Therefore, the focus of the market will remain on the monthly US NFP jobs report, which will be one of the most important economic data that will set the tone for the next FOMC meeting later this month.
Before the key event, investors may be reluctant to open aggressive positions. This, in turn, could limit any further gains for the GBP / USD pair, at least for the time being.
GBP / USD technical levels
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