The GBP/USD pair experienced a consolidation phase near 1.2650 after a drop on Wednesday. The Pound Sterling faced challenges in staging a steady recovery, particularly following softer-than-expected UK inflation readings. The Bank of England‘s (BoE) policy outlook shifted earlier, with expectations of a 25 basis points rate cut in May.
The US Dollar (USD) struggled to find demand, supporting GBP/USD stability. US stock index futures indicated an improving risk mood. The US economic calendar featured the final revision to the third-quarter Gross Domestic Product growth and weekly Initial Jobless Claims. The USD could face pressure if jobless claims rise more than expected, while a reading at or below 200K might boost the USD and trigger a decline in GBP/USD.
The Relative Strength Index (RSI) on the 4-hour chart recovered toward 50, indicating a loss of bearish momentum. Resistance levels for GBP/USD were noted at 1.2700, 1.2750, and 1.2790-1.2800, while support levels included 1.2650, 1.2600, and 1.2540.