GBP/USD is trading on the back foot below 1.2600 in the European session. The pair respects the broad US Dollar strength ahead of the central bankers’ showdown at the annual Jackson Hole Symposium. Reduced bets for a 6% BoE peak rate also add to the weight on Cable.

By dropping under 1.2700 on Thursday, the GBP/USD pair entered the descending regression channel once more. The Relative Strength Index (RSI) indicator on the four-hour chart, which had risen to 50 on Wednesday, has since fallen down to 40, emphasizing buyers’ reluctance.

On the downside, 1.2650 (mid-point of the descending channel) aligns as next important support before 1.2600 (psychological level, static level) and 1.2560 (lower limit of the descending channel).

GBP/USD may encounter significant resistance at 1.2730, which is where the 20-, 50-, and 100-period Simple Moving Averages (SMA) are situated, in the event that it is able to retake 1.2700 and stabilize above that level. An extended rebound toward 1.2800 may be possible if the four-hour closing rises above 1.2730 (psychological level, static level).

After falling toward 1.2600 on Wednesday, GBP/USD made a sharp U-turn and closed the day virtually unchanged above 1.2700. The pair, however, came under renewed bearish pressure in the European session on Thursday and broke below 1.2700.

Following the dismal UK PMI data, Pound Sterling came under selling pressure as investors reassessed the Bank of England’s rate outlook. According to Reuters, markets are currently pricing in a less than 50% probability of the BoE peak rate reaching 6%. Highlighting dovish BoE bets, the rate-sensitive 2-year UK gilt yield fell nearly 4% on Wednesday and broke below 5%.

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On the other hand, the USD erased its daily gains in the American session on Wednesday due to dismal US PMI figures, which allowed GBP/USD to overcome the bearish pressure.

In the meantime, the market activity was dominated by risk flows and the GBP/USD was able to maintain its position thanks to significant increases in US technology stocks.

At the time of press, Nasdaq Futures were up 1%, while Dow Futures were down 0.2%. A bullish opening in Wall Street could make it difficult for the USD to gather further strength.

Pound Sterling price today

The Pound Sterling (GBP) percentage movement today in relation to the main currencies listed is shown in the table below. The US Dollar was the strongest versus the British pound.

Market participants will also pay close attention to the US data. Durable Goods Orders in the US is forecast to decline 4% in July and the weekly Initial Jobless Claims is expected to tick higher to 240,000 from 239,000 in the previous week. In case the number of first time applications for unemployment benefits rise more than 250,000, the USD could weaken with the immediate reaction. Ahead of Federal Reserve Chairman Jerome Powell’s speech at the Jackson Hole Symposium, however, investors could refrain from taking large positions.

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