- GBP/USD witnessed some selling on Thursday and eroded a part of the overnight gains.
- A softer risk tone benefitted the safe-haven USD and exerted some pressure on the pair.
- Investors look forward to the US economic releases for some meaningful trading impetus.
The GBP/USD pair maintained its offered tone heading into the European session and was last seen trading near daily lows, around the 1.3825-30 region.
The pair struggled to capitalize on the previous day's stronger UK CPI-led rebound from sub-1.3800 levels, or weekly lows and edged lower through the first half of the trading action on Thursday. A generally softer risk tone – as depicted by a cautious mood around the equity markets – extended some support to the safe-haven US dollar. This, in turn, was seen as a key that exerted some pressure on the GBP/USD pair.
The greenback was further supported by expectations that the Fed could still begin rolling back its massive pandemic-era stimulus later this year. That said, signs of easing inflationary pressures in the US raised uncertainty about the likely timing of the Fed's tapering plan. This might hold the USD bulls from placing aggressive bets and help limit any deeper losses for the GBP/USD pair, at least for the time being.
There isn't any major market-moving economic data due for release from the UK, leaving the GBP/USD pair at the mercy of the USD price dynamics. Later during the early North American session, traders will take cues from the US macro releases – Retail Sales, Philly Fed Manufacturing Index and Initial Weekly Jobless Claims. This, along with US bond yields and the broader market risk sentiment, might influence the greenback.
Looking at the technical picture, the GBP/USD pair on Wednesday managed to defend and attract some buying near the lower boundary of a short-term ascending trend channel. The mentioned support, currently around the 1.3800 mark, should act as a key pivotal point and help determine the near-term trajectory for the major.
