GBP/USD Forecast: Rangebound Above 1.33 Despite Upbeat Uk Data

• GBP/USD failed to gain significant support and remained in a narrow range.
• Furthermore, the upbeat UK retail sales data failed to inspire traders or provide any incentive.
• Bulls were held back from aggressive betting by excitement over COVID-19 and risk aversion.

The GBP/USD forecast is neutral for now as the pair could not hold gains and retreat back to the 1.3300 handle on the day. During the London session, the GBP/USD price was stable at around 1.3320 and reacted rather restrainedly to the UK macro data.

The GBP/USD price failed to make any meaningful progress on the last trading day of the week due to a combination of diverging forces. First, the Bank of England unexpectedly raised interest rates on Thursday, which supported the British pound. Additionally, the largest stock exchange’s gains were bolstered by better-than-expected UK retail sales data amid the prevailing US dollar sales bias.

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According to the UK Office for National Statistics, retail-adjusted inflation rose 1.4% in November. The 0.8% and 1.1% gains recorded in the previous month were much higher than the consensus predictions. But, at least for now, bulls were restrained from aggressive rate hikes by concerns about the economic risks associated with the Omicron outbreak.

The dollar extended its correction after the FOMC meeting and remained defensive in the first half of Friday’s trade. Consequently, the GBP/USD pair benefited from this tailwind. Meanwhile, the hawkish outlook of the Fed and the risk impulse in the markets supported the safe dollar. Therefore, taking further steps up will require caution.

As you recall, the Fed announced on Wednesday that it would double its reduction rate to $30 billion per month. In addition, the so-called scatter plot revealed that officials expect the federal funds rate to increase threefold next year. The result is a slight decline in purchases around the dollar.

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GBP/USD price technical forecast: Stagnant around 1.3300

The GBP/USD price is wobbling just above the 1.3300 mark after finding rejection around 200-period SMA on the 4-hour chart. The volume bars show no clues for a bullish breakout. Hence, we can expect a bearish continuation below 1.3300. The downside targets coincide at 1.3250 ahead of 1.3200.

If the price sustains above 1.3300, we may see a jump towards 1.3370 ahead of 1.3400. However, the probability of upside movement is thin for now.