The GBPUSD finds violent response at 1.2070.

After a two-day decline, GBPUSD entered a consolidation period above 1.2000 on Friday. The pair appears to have developed a short-term trading range between 1.2000 and 1.2070.

The focus switches to January PCE inflation statistics from the United States.

Despite falling US Treasury bond rates, the US dollar held its ground on Thursday. The weekly Initial Jobless Claims report, which fell below 200,000 for the sixth week in a row, reminded investors of the country’s tight financial conditions. Furthermore, the US Bureau of Economic Analysis (BEA) revealed that the fourth-quarter GDP deflator was revised up to 3.9% from 3.5% in the previous estimate, showing a larger impact of inflation on GDP growth.

Early Friday, the market tone is neutral, and the GBPUSD pair is unchanged. stays in the above-mentioned range. The FTSE 100 Index in the United Kingdom is up 0.3% on the day, but American stock index futures are down between 0.2% and 0.6%.

The BEA will issue the January Personal Consumption Expenditures (PCE) Price Index data in the second half of the day.

The yearly Core PCE Price Index is the inflation indicator that the Fed closely monitors while determining monetary policy. Core PCE inflation is predicted to climb 0.4% month on month, bringing the annual figure down to 4.3% from 4.4% in December. If the monthly data exceeds market expectations, the immediate response might help the US Dollar (USD) gain momentum. With the help of investors. Although the market is completely pricing in at least two more 25 basis point Fed rate rises, the market reaction may be brief.

A mild monthly growth of 0.2% or 0.3%, on the other hand, might weigh on the USD and drive a leg higher in GBPUSD. In such case, investors may attempt to book their weekly profits, providing an extra lift to the pair.

GBPUSD Technical Outlook

The Relative Strength Index is drifting sideways just below 50, indicating that the GBPUSD is neutral in the short term.1.2070 (20-period Simple Moving Average (SMA) on the four-hour chart, 50-period SMA, 100-period SMA, Fibonacci 61.8% retracement of the most recent advance) aligns as significant barrier to the higher.

A four-hour close above that level may entice buyers and pave the way for a longer-term recovery towards 1.2100 (psychological level, static level) and 1.2140 (Fibonacci 50% retracement).

1.2000 is the number for immediate assistance (static level, psychological level). The previous time the GBPUSD fell below that level, it reaffirmed it as resistance, and it plunged to new multi-week lows. As a result, if 1.2000 fails, a similar response may be predicted, with the pair aiming 1.1960 (previous support, static level) and 1.1930. (Static level).