Market news
26.05.2023, 13:55

GBP/USD: Recovery runs out of steam near the 1.2400 hurdle

  • GBP/USD bounces off lows near 1.2300 the figure on Friday.
  • The greenback regains composure following US data releases.
  • UK Retail Sales surprised to the upside in April.

The British pound regains poise and motivates GBP/USD to reclaim ground lost and advance to the vicinity of the 1.2400 mark at the end of the week.

GBP/USD appears supported near 1.2300

Following an earlier uptick to the boundaries of 1.2400 the figure, GBP/USD now comes under some selling pressure on the back of the rebound in the greenback, which was particularly exacerbated higher US inflation figures tracked by the PCE.

Indeed, further resilience from key US fundamentals motivates the resurgence of the buying interest in the greenback, prompting at the same time the USD Index (DXY) to trim initial losses.

In the meantime, better-than-expected UK Retail Sales for the month of April lent initial legs to the quid and accompanied the move higher in Cable, all in line with rising speculation of further tightening by the BoE at the June 22 event.

GBP/USD levels to consider

As of writing, the pair is gaining 0.19% at 1.2345 and the surpass of 1.2668 (2023 high May 8) would open the door to 1.2864 (200-week SMA) and then 1.3000 (psychological level). On the downside, the next support emerges at 1.2308 (monthly low May 25) seconded by 1.2274 (monthly low April 3) and finally 1.2010 (weekly low March 15).


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