GBP/USD Targets 1.2600 Amid US Recovery and UK Inflation

1 maj 2023

The GBP/USD currency pair is currently attempting to breach the significant resistance level of 1.2600, despite a notable recovery in the US Dollar Index. The US economy has exhibited robustness in consumer spending on essential goods and services, thereby increasing the likelihood of further interest rate hikes by the Federal Reserve. Conversely, inflationary pressures in the UK persist, with rising food prices and a shortage of labor contributing to the trend. While the Cable underwent a minor correction after failing to maintain levels above 1.2580, its decline was significantly lower than the recovery of the US Dollar Index, indicating that the Pound Sterling is displaying resilience. From a technical perspective, the price opened with a retracement, potentially leading to a pullback to the prior support area before advancing towards the 1.2600 resistance level.