GBP/USD hangs near daily low, well offered below 1.2400 ahead of US PCE Price Index

• GBP/USD meets with some supply on Friday, though the downside remains cushioned.
• A softer risk tone, rebounding US bond yields benefit the USD and weigh on the major.
• Traders eye the US PCE for some impetus ahead of key central bank meetings next week.

The GBP/USD pair continues with its struggle to find acceptance above the 1.2400 mark and comes under some selling pressure on the last day of the week. The pair remains on the defensive through the first half of the European session and is currently placed around the 1.2380-1.3375 region, just a few pips above the daily low.

A combination of factors lends support to the US Dollar, which, in turn, is seen exerting some downward pressure on the GBP/USD pair. The better-than-expected US growth figures released on Thursday fueled speculations that the Fed will maintain its hawkish stance for longer. This, in turn, leads to a goodish intraday move up in the US Treasury bond yields, which, along with a softer risk tone, benefits the safe-haven Greenback.

The USD, meanwhile, fails to attract any meaningful buying as investors still seem convinced that the Fed will soften its hawkish stance and deliver a smaller 25 bps next week. Moreover, speculations that elevated consumer inflation will force the Bank of England (BoE) to continue lifting rates offer some support to the British Pound. This, in turn, should help limit any meaningful downside for the GBP/USD pair, at least for now.

Traders also seem reluctant and prefer to wait for the release of the Fed's preferred inflation gauge - the Core PCE Price Index. The data will play a key role in influencing the US central bank's rate-hike path, which will drive the USD demand and provide some impetus to the GBP/USD pair. The focus, however, will remain glued to next week's key central bank event risks - the FOMC policy decision on Wednesday and the BoE meeting on Thursday.

Technical levels to watch