“The GBP/USD pair continues its positive trajectory for the sixth consecutive day on Thursday, surging to a new 15-month peak in the Asian session. Bullish investors are now aiming to extend the momentum beyond the significant 1.3000 psychological level.”
The US Dollar (USD) remains near its lowest point since April 2022, as market speculations persist that the Federal Reserve (Fed) will refrain from raising interest rates beyond July. These speculations gained further support from the latest US Consumer Price Index (CPI) report, released on Wednesday, which indicated a moderation in consumer prices during June.
Consequently, US Treasury bond yields continue to decline, weighing down on the US Dollar. Additionally, the prevailing risk-on sentiment in the market weakens the safe-haven status of the Greenback, acting as a tailwind for the GBP/USD pair.
Conversely, the British Pound (GBP) receives support from expectations that the Bank of England (BoE) will tighten its monetary policy to control inflation. This sentiment was reinforced by robust UK wage growth data.
Recent official data revealed that wages, excluding bonuses, rose by 7.3% in the three months leading up to May, matching the previous month’s growth and representing the highest rate since records began in 2001. This serves as another factor bolstering the GBP/USD pair.
Nevertheless, bullish traders appear cautious about entering new positions due to the overbought conditions signaled by the Relative Strength Index (RSI) on short-term charts. Therefore, it would be prudent to wait for some intraday consolidation or a minor pullback before considering further gains.
Traders are now looking to UK macroeconomic data for momentum, ahead of the release of the US Producer Price Index (PPI) later in the early North American session. However, the overall fundamentals suggest that the path of least resistance for the GBP/USD pair is upward.
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