GBP/USD Price Analysis: Eases from two-month top ahead of US CPI, bullish potential intact

• GBP/USD witnessed modest pullback from an over two-month high touched this Wednesday.
• The technical set-up still favours bullish traders and supports prospects for additional gains.
• A dip towards the 1.3600 mark could still be seen as buying opportunity and remain limited.

The GBP/USD pair retreated a bit from over two-month high touched earlier this Wednesday and was last seen trading near the daily low, around the 1.3625-20 region. The downtick lacked any fundamental catalyst and could be attributed to some repositioning trade ahead of the critical US consumer inflation figures.

From a technical perspective, the overnight sustained strength beyond the 61.8% Fibonacci level of the 1.3834-1.3161 downfall and the 1.3600 mark favours bullish traders. The constructive outlook is reinforced by bullish technical indicators on the daily chart, which are still far from being in the overbought zone.

Hence, some follow-through strength towards testing a downward-sloping trend-line hurdle, currently around the 1.3675-80 region, remains a distinct possibility. The mentioned barrier extends from July 2021 swing high, which if cleared would be seen as a fresh trigger for bulls and pave the way for additional gains.

The GBP/USD pair might then climb beyond the 1.3700 mark, towards testing the next relevant resistance near the 1.3735 region. The momentum could further get extended and allow the pair to aim back to reclaim the 1.3800 round-figure mark for the first time since October.

On the flip side, any further decline towards the 1.3600 mark could still be seen as a buying opportunity and remain limited near the 61.8% Fibo. resistance breakpoint, around the 1.3575 region. This is closely followed by the 100-day SMA, around mid-1.3500s, which should now act as a pivotal point for traders.

A convincing break below might prompt some technical selling and drag the pair further towards the 50% Fibo. level, around the 1.3500 psychological mark. Some follow-through selling could pave the way for a slide towards the 1.3460-55 region en-route the 1.3430 area and the 38.2% Fibo. level/50-day SMA confluence near the 1.3400 mark.

GBP/USD daily chart

Technical levels to watch