GBP/USD gained ground on Thursday, tapping a new 44-month high.
The Pound Sterling is getting firm support from a broadly weakening Greenback.
US PCE inflation data to dominate the release calendar on Friday.
GBP/USD rose on Thursday, stepping into a fourth straight day of firm gains and clipping 44-month highs near 1.3770. A broad sell-off in the US Dollar is bolstering the Greenback’s major counter-currencies, helping to push Cable into its highest bids in nearly four years.
Market sentiment has recovered its footing following a tense start to the week: easing Middle East tensions and continued waffling on trade barriers by the Trump administration are helping to keep risk appetite on the high end. White House Press Secretary Karoline Leavitt floated the idea of the July 9 deadline for the return of reciprocal tariffs to not be a hard barrier, signaling to markets that the Trump administration has been pushed off of its high-tariff threats, even though prospects for the firm trade deals that President Trump was promising remain fairly anemic.
Inflation metrics will take on an increasingly significant role in the weeks and months ahead as policymakers and market participants alike look for signs of inflationary pressure from President Trump’s tariff policies. US Personal Consumption Expenditure Price Index (PCE) inflation for the month of May will print on Friday. Core annualized PCE inflation is expected to rise to 2.6% YoY, with monthly figures expected to hold steady at 0.1% MoM.
GBP/USD price forecast
GBP/USD caught an extended ride into fresh 44-month highs on Thursday, testing above 1.3770 for the first time since October of 2021. The pair is on pace to close in the green for a fifth straight month as the US Dollar broadly weakens across the board.
Cable bidders may be flying too close to the sun as GBP/USD price quickly outrun rising trendlines, with price action trading well above the 200-day Exponential Moving Average (EMA) near 1.3020. Technical oscillators are pinned in overbought territory, warning of a potential pullback on the cards.
GBP/USD daily chart
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