GBP/USD puts the 1.3300 level to the test

GBP/USD hovers around the 1.3300 area on Thursday, supported by a broad rebound in risk-sensitive assets, renewed weakness in the Greenback and lingering uncertainty over US–China trade talks.

GBP/USD Technical Overview

The Relative Strength Index (RSI) indicator on the 4-hour chart stays slightly below 50 and GBP/USD continues to trade at around the 50-period Simple Moving Average, reflecting GBP/USD indecisiveness in the near term.

On the downside, the Fibonacci 23.6% retracement of the latest uptrend aligns as a key support level at 1.3250. If GBP/USD falls below this level and starts using it as resistance, additional losses toward 1.3200 (static level) and 1.3150 (Fibonacci 38.2% retracement) could be seen. Looking north, interim resistance could be spotted at 1.3300 (static level) ahead of 1.3335 (20-period SMA) and 1.3400-1.3410 (round level, static level).

Fundamental Overview

The disappointing Purchasing Managers Index (PMI) data from the UK, which showed a contraction in the private sector's business activity in April, caused Pound Sterling to weaken against its rivals during the European trading hours on Wednesday. Later in the day, the US Dollar (USD) benefited from heightened optimism about easing tensions between China and the US, causing the pair to stretch lower.

The Wall Street Journal reported that the White House was considering slashing tariffs on Chinese goods to de-escalate the trade conflict. Speaking on the same matter, United States (US) Treasury Secretary Scott Bessent noted that both sides are aware that current tariff levels are not sustainable and said that he would not be surprised if they were to come down in a mutual way.

Early Thursday, however, China's Commerce Ministry clarified that any content about US-China economic and trade negotiations were groundless and had no factual basis. "If the US really wants to resolve the issue, it should lift all unilateral tariff measures against China," the ministry said.

This latest development seems to be making it difficult for the USD to find demand and helping GBP/USD rebound.

Later in the session, the US Department of Labor will publish the weekly Initial Jobless Claims data. Markets expect the number of first-time application for unemployment benefits to edge higher to 221,000 from 215,000 in the previous week. A positive surprise, with a print at or below 200,000, could support the USD with the immediate reaction and limit GBP/USD's upside. On the other hand, a disappointing reading of 230,000, or higher, could open the door for an extended rebound in the pair.