Anna 
The British Pound (GBP) maintains its position in proximity to resistance at 1.23 during early Thursday trading, having persistently tested the pivotal barrier at 1.2328, represented by the 38.2% Fibonacci retracement level of the 1.2800 to 1.2037 decline, along with the descending 30-day EMA. Nevertheless, the currency remains confined within a narrow trading range, with its gains currently limited.
Despite encountering disappointing UK economic data today, the pound retains a bullish posture. The GDP data for August aligned with expectations, but the data for July was revised downward. Additionally, the manufacturing sector performed worse than anticipated, and the trade deficit expanded in August, which has contributed to negative signals.
The release of the Federal Reserve meeting minutes indicated a more cautious approach to monetary policy, given the global economic landscape and elevated uncertainty. This has added pressure to the U.S. dollar, potentially offering support to the pound.
Market participants are eagerly awaiting the release of the U.S. Consumer Price Index (CPI) data today. If the inflation rate falls in line with or below expectations, it could provide further relief for policymakers and weigh on the U.S. dollar.
From a technical perspective, the daily chart displays some positive signs. The 14-day Momentum indicator has ventured into positive territory, and the 10- and 20-day EMAs have turned bullish. However, the Stochastic indicator is currently in overbought territory, and the RSI hovers around the 50 mark, which warns of potential challenges for the bullish outlook.
In a bullish scenario, a clear break above the 1.2328 pivot is deemed necessary to signify the continuation of the six-day recovery rally, with potential targets at 1.2418/43, representing the 50% retracement of the 1.2800 to 1.2037 decline and the 200-day EMA, respectively.
Conversely, repeated failures to surpass 1.2328 would elevate the risk of the recovery losing momentum. A breach below the daily conversion line (Tenkan-sen) at 1.2187 would trigger a reversal signal, with the focus shifting toward downside prospects in the near term.
