GBP/USD slipped on Thursday, easing from an over two-month high near 1.3560 as a firmer US Dollar pressured the pair. Soft US inflation data, higher oil prices and US-Iran tensions shaped the move, while UK growth data left the Pound muted.
The GBP/USD pair attracted sellers on Thursday and erased part of the previous day's gains, retreating from an over two-month high around the 1.3555-1.3560 region. Spot prices held modest intraday losses around the 1.3525 zone through the first half of the European session, though the broader setup still favored buyers.
A firmer Dollar caps the Pound
The pullback traced back to renewed support for the US Dollar. As investors digested this week's soft US Consumer Price Index and Producer Price Index reports, elevated crude oil prices revived energy-driven inflation fears and Federal Reserve rate hike expectations. Escalating US-Iran tensions added to the safe-haven bid, exerting pressure on the pair.
Meanwhile, the Pound stayed muted after fresh UK data. The Office for National Statistics reported that the economy expanded 0.1% in May, matching expectations, after contracting at a similar pace in April. UK Industrial Production came in weaker than projected, contracting 0.5% Month-on-Month against a 0.1% estimate.
Technical picture stays constructive
Despite the dip, the technical outlook remains tilted higher. The rally resumed and the break of 1.3459 resistance suggests the correction from 1.3867 has completed at 1.3139. Intraday bias points to the 1.3657 resistance for confirmation, with risk staying on the upside as long as 1.3339 support holds.
On the larger view, moves from 1.3867 form a corrective pattern within the broader uptrend from the 2022 low. With 1.3008 support intact, a later break of 1.3867 would open the way toward the 1.4248 key resistance, the 2021 high. A firm break of 1.3008 would instead risk a deeper fall.
Sources: FXStreet, ActionForex
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