GBP/USD Slightly Recovers Amid Cautious Fed

In the middle of the North American session, the Pound Sterling is still available due to rumours of a possible rate decrease by the Federal Reserve in June. As a result, the GBP/USD pair has somewhat rebounded against the US Dollar. The US economic schedule hasn’t been able to strengthen the Dollar, which is treading water versus the majority of G7 currencies, and the uncertain Fed outlook and impending BoE rate cuts have agitated currency markets.

Bostic and Cook, two Federal Reserve officials, support a cautious approach and highlight the dangers of premature policy easing, whereas Goolsbee believes that more aggressive action is appropriate until there is convincing evidence of declining inflation.

New home sales in the US housing market decreased somewhat in February, despite the Chicago Fed reporting gains in the National Activity Index. According to data from the UK CBI Distributive Trades Survey, the monthly retail sales balance increased to 2. GBP/USD in March from a level of -7 one year earlier.

A technical recession is predicted, thus traders will be watching the announcement of the GDP for Q4 2023 closely. According to money market futures projections, there is a 75% likelihood that the BoE will lower interest rates in June, up from 35% at the start of this week.

To validate the reversal pattern, however, a break above the 50-day moving average (DMA) of 1.2679 is required. This would expose 1.2700 and the high of 1.2803 on March 21. The chart pattern would be invalidated if the major falls below the 200-DMA at 1.2591, as the pair may continue to lose ground.