GBPUSD forms reversal pattern amid soft macroeconomic signals

The GBPUSD currency pair is rising for the fourth straight day on Friday, supported by a weaker US dollar amid ongoing concerns about the state of the global and American economies.

The dollar came under further pressure after March US inflation data came in softer than expected. The annual Consumer Price Index (CPI) slowed to 2.4%, down from 2.8% in February and below the forecast of 2.6%. Core CPI, which excludes volatile categories, rose 2.8%, also missing expectations of 3.1% and coming in lower than the previous 3.0%. As a result, traders are now pricing in a Fed rate cut as early as June.

The dollar faced additional headwinds as President Trump declared a 90-day suspension of new tariffs for most trading partners. Despite increasing duties on China, this overall easing of trade tensions improved global risk sentiment, lifting demand for risk assets including the British pound.

Against this backdrop, traders have revised their expectations for the Bank of England’s monetary policy. The market is now pricing in three quarter-point rate cuts by the end of the year, aligning with the central bank's previously signaled quarterly easing cycle. A rate cut in May remains likely, with additional moves projected in August and November.

The fundamental signals are now being confirmed by the price action on the GBPUSD chart.

From a technical point of view, GBPUSD has completed a bearish AB=CD harmonic pattern on the daily chart (D1), reaching a potential reversal zone near 1.3270.

The Relative Strength Index (RSI 14) is showing divergence, indicating weakening bullish momentum and a potential trend reversal.

Short-term prospects for GBPUSD suggest selling with the target of 1.2560. Part of the profit should be taken near the level of 1.2880. A Stop loss could be set at 1.3270.

Since the bearish scenario is short-term, the position should not exceed 2% of your total balance to reduce risks.