The GBP/USD pair advanced further on Thursday, continuing its bullish momentum as the US Dollar weakened across the board. The decline in US Consumer Price Index (CPI) inflation, which came in below expectations, coupled with a reduction in risk-off sentiment due to fluctuating US tariffs, provided the Sterling with an opportunity to recover from recent losses.
March’s US CPI data revealed a significant slowdown in inflation, with core CPI falling to 2.8% year-over-year, marking a four-year low after remaining above 3.0% for eight months. Headline CPI also dropped to 2.4%, raising concerns in the market that ongoing tariffs could reverse the Federal Reserve’s hard-won progress in controlling inflation.
US Consumer Sentiment and Inflation Expectations in Focus
Attention now turns to Friday’s release of the University of Michigan (UoM) Consumer Sentiment Index, with analysts predicting a further contraction. The index is expected to dip to a nearly three-year low of 54.5 in April, reflecting consumer discomfort under the Trump administration’s tariff and trade policies. Additionally, UoM’s 1-year and 5-year Consumer Inflation Expectations will be published, with previous readings of 5% and 4.1%, respectively, set to offer further insight into public inflation concerns.
GBP/USD Technical Outlook: Eyes on the 1.3100 Level
For the third consecutive day, GBP/USD has continued to climb, though the pair remains just below the key 1.3000 level. The Pound has gained 1.3% against the Greenback and is up nearly 2.2% from the recent low near 1.2700. The move has been supported by a technical bounce off the 200-day Exponential Moving Average (EMA), with the next challenge for bulls being the 1.3100 level.
If GBP/USD can break through this resistance, further gains could follow, but the 1.3100 region will be a crucial test for the pair in the near term.
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