Cable went on the back foot to close out the week, failing to maintain a foothold above the 1.25 handle and in need of a solid foray across the 200-day moving average beyond that figure to change the soft-sterling narrative.

After the worrying price data in the Q1 U.S. GDP report, traders appeared to breathe a sigh of relief following March PCE figures.

Despite a topside surprise relative to expectations, a 0.1ppt beat on both the core and headline figures were arguably less than what could’ve been given the GDP report.
In turn, market pricing over Fed policy was little changed with 35bps of easing seen by year-end 0#FEDWATCH.

The data reaffirms the current stance from Fed officials that more confidence is needed until they can consider cutting interest rates -- a message that will likely be reiterated at next week’s FOMC meeting.

For GBP/USD, while 1.25 is a key pivot zone – prior support, now resistance – the 200-DMA situated at 1.2555 needs clearing before bulls can get excited.
As previously highlighted, month-end flows will continue to favor the greenback in the immediate future.

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