- On Thursday, GBP/USD is losing 0.18%
- A positive market mood and market talk of the Fed’s hawkish line lifted US Treasury yields, supporting the dollar.
- GBP/USD Price Forecast: Struggling Bulls at 1.3100 Opened the Door for Further Downside Pressure.
The British Pound failed to test the 1.3100 mark, leaving it vulnerable to selling pressure; Consequently, the prices of GBP/USD They fell to a daily low of 1.3022. At the time of writing, the GBP/USD pair is trading at 1.3043, down around 0.18%.
European and US stocks trade higher, while US Treasury yields rise. The dollar remains supported by the latter, as shown by the US dollar index, which rose 0.22% to 100.571. Some speeches by central bank presidents dominate the news.
Lately, Fed Chairman Jerome Powell has said that moving a bit faster is appropriate, and that a 50bp hike will be on the table for the May meeting. Powell added that the economy is performing strongly and the job market remains tight.
Earlier, St. Louis President James Bullard reiterated that the Fed is behind the curve and will not have a hard landing. He highlighted that a 75bp hike had been made and the world was not over.
On Thursday, San Francisco Fed President Mary Daly said the Fed would “probably” raise rates by 50 bps in a couple of meetings. However, she is open to deliberating on the size of the increases needed, according to Yahoo Finance Interview. Daly reiterated that the Fed needs to take a measured pace in rate hikes and get rates up to 2.5% by the end of the year.
Meanwhile, in the European session, the BoE’s Catherine Mann said on Thursday that she would need to look at whether 25 bps or additional interest rate hikes are required for the BoE to control inflation. She added that “if we see an increase in energy prices and a slowdown in sales, then, in a sense, we are already in stagflation; although, it is a bit premature to use that term.”
That said, the short-term outlook for GBP/USD is tilted to the downside. As the Fed braced for successive meetings of 50bp rate hikes, the BoE’s latest 25bp hike had a dissenter, Jon Cunliffe, who said on April 4 that the central bank may not need to take sustained action to stop stiffer inflation in the UK.
GBP/USD Price Forecast: Technical Outlook
The GBP/USD pair remains tilted lower. Since the GBP/USD bulls failed to break 1.3100, they opened the door for further decline. Also, the Relative Strength Index (RSI), which was pointing higher, turned bearish and traded at 43.56.
With that being said, the first GBP/USD support would be 1.3000. Once cleared, the next support would be the April 19 daily low at 1.2980, followed by the prior year low at 1.2972.
Technical levels
Source: Fx Street
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