- GBP / USD regains positive traction on Friday and halts its recent slide from multi-week highs.
- The prevailing bearish sentiment around the USD is considered a key factor offering support to the pair.
- The British pound receives an additional boost following the release of the upbeat UK PMI figures for April.
The pair GBP/USD it is struggling to capitalize on its positive intraday move and is down a few pips from daily highs. At the time of writing, the pair is trading around the region of 1.3875, up 0.26% on the day.
The pair has managed to regain some positive traction on the last trading day of the week and for now, appears to have halted this week’s retracement slide from the key psychological level of 1.4000. This marks the first day of positive movement in the previous four and is solely due to the prevailing bearish sentiment around the US dollar.
The market now seems convinced with the view that any increase in inflation is likely to be temporary and has been lowering its expectations of a tightening of the Fed’s monetary policy earlier than anticipated. This has been evident from the fact that USD bulls ignored upbeat data from Thursday’s initial US jobless claims and a modest rally in US Treasury yields.
The British pound has received an additional boost following the release of better than expected UK preliminary PMI figures. for April. The preliminary estimate indicated that business activity in both the manufacturing and service sectors expanded more than expected in the current month. This, in turn, has allowed the GBP / USD pair to break three consecutive days of losing streak.
Despite the supporting factors, the rally has lacked strong bullish conviction and has stopped just below the round 1.3900 level. This makes it wise to wait for a few subsequent purchases before positioning yourself for additional profit.
Market participants are now awaiting the US economic calendar, which highlights the release of the preliminary manufacturing and services PMI at the start of the American session. This, coupled with US bond yields, could influence USD price dynamics and generate some short-term trading opportunities around the GBP / USD pair.
GBP / USD technical levels
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