GBP/USD gained approximately 0.4% on Wednesday, closing near 1.3595 after testing a session high of 1.3645 but failing to sustain a move above the 1.3600 level. The currency pair has shown hesitation at the upper end of its recent trading range, with technical indicators such as a cluster of upper wicks and small-bodied candles near the session high suggesting fading bullish momentum at this resistance zone [1].
On the UK economic front, the April S&P Global Composite and Services Purchasing Managers' Index (PMI) both exceeded consensus expectations, coming in at 52.6 and 52.7 respectively. These figures indicate that private sector activity in the UK is performing better than anticipated, despite a generally softer macroeconomic backdrop. However, the construction sector remains a concern, with the April Construction PMI previously reported at a contractionary 45.6, highlighting ongoing weakness in this segment. The market is also awaiting Friday's Halifax House Prices data for further insight into the UK economy [1].
In the United States, the April ADP private payrolls report surpassed expectations at 109K versus the 99K forecast. Despite this positive data and hawkish remarks from Federal Reserve official Alberto Musalem, the US Dollar failed to gain significant support. Market sentiment was instead influenced by risk-on flows amid hopes for a US-Iran peace deal, although Iranian officials have dismissed the latest US proposal and the Strait of Hormuz remains closed to most commercial traffic. The upcoming US Non-Farm Payrolls (NFP) report on Friday is seen as the next major catalyst, with consensus expecting a sharp slowdown to 60K from 178K previously. Additionally, the University of Michigan consumer sentiment and inflation expectations data are also on the radar [1].
Technically, GBP/USD maintains a modest bullish intraday bias, trading above the daily open at 1.3567. The Stochastic RSI at around 73 suggests positive momentum, though it is approaching short-term overbought territory, which could limit further gains in the near term. Initial support is seen at the day's open, and as long as this level holds, risks remain tilted to the upside, even if momentum readings prompt brief consolidations or minor reversals. On the daily chart, GBP/USD is trading above the 50-day Exponential Moving Average at 1.3465, reinforcing a constructive near-term outlook [1].
CONCLUSION
GBP/USD has shown resilience, supported by stronger-than-expected UK PMI data and technical factors, despite lingering concerns in the construction sector and global geopolitical uncertainties. Market participants are now focused on upcoming US NFP data and UK economic releases, which are likely to set the next directional move for the pair.