Market Analysis

The Pound Sterling (GBP) has stabilized after hitting a fresh monthly peak near 1.2700 against the US Dollar (USD) during Thursday's London session. Short-term prospects for the GBP/USD pair look positive as uncertainty surrounding the timing of a Bank of England (BoE) rate cut has intensified, buoyed by resilient wage growth in the United Kingdom (UK). This scenario favors the Pound Sterling.

UK Average Earnings exhibited steady growth in the three months leading to March, sparking concerns about the progress towards achieving the desired 2% inflation rate. Robust wage growth contributes to service inflation, posing a significant hurdle to the deflationary process.

Looking ahead to the weekend, there are no significant releases on the UK economic calendar. Consequently, investors will closely monitor commentary on interest rates from BoE policymakers, with Megan Greene and Catherine Mann scheduled to speak on Thursday and Friday, respectively.

Technical Analysis: Pound Sterling retraces 61.8% of losses to 1.2700

The Pound Sterling has retraced 61.8% of its losses from a 10-month high near 1.2900 reached on March 8. Both the short and long-term outlook for the GBP/USD pair has turned bullish as it surpasses the 20-day and 200-day Exponential Moving Averages (EMAs) trading around 1.2565 and 1.2536, respectively.

The 14-period Relative Strength Index (RSI) has shifted into the bullish range between 60.00 and 80.00, indicating momentum favoring the upside.

Paraphrasing text from "FX Street" all rights reserved by the original author.