The GBP/USD currency pair, often referred to as the “Cable,” has been influenced by a myriad of economic factors recently. The British pound experienced a surge during the trading session, primarily driven by the disappointing CPI and employment figures from the United States. However, the pair seems to be consolidating within a specific range. The Bank of England continues to maintain a tight monetary policy, mirroring the Federal Reserve’s stance. In such an environment, the market doesn’t perceive a significant differential between the two currencies, leading to a lot of sideways movement. The upcoming UK GDP and US PPI numbers are anticipated to play a pivotal role in determining the pair’s direction.
From a technical standpoint, the GBP/USD pair has shown some interesting patterns. After the US CPI readings and unemployment claims, the British pound shot up, but it’s struggling to maintain that momentum. The 50-day EMA seems to be acting as a magnet for the price. Currently, the pair is consolidating just above the 1.2650 level, which has proven to be significant in the past. If the pair breaches this level, it will encounter the uptrend line and the 200-day EMA, both offering support. A drop below the 200-day EMA could signal a more profound decline, potentially altering the trend. Conversely, breaking above the 1.2800 level could open doors to the 1.3000 mark, a psychologically significant level. Overcoming this could then target the recent high at 1.3150.