GBPUSD: The Return of the Bullish Cycle

GBP/USD experienced a shift in direction after recovering on Tuesday and dropped towards 1.2700 during the morning hours in Europe on Wednesday. The technical analysis suggests a bearish trend, and if the support at 1.2700 fails to hold, more sellers could enter the market.

The improvement in risk sentiment led to a weakening of the US Dollar against its major counterparts on Tuesday, allowing GBP/USD to rebound. While the UK's FTSE 100 Index is trading positively in the middle of the week, US stock index futures remain negative, indicating a mixed market sentiment that hampers the pair's ability to regain momentum.

Later today, Bank of England (BoE) Governor Andrew Bailey will participate in a panel discussion on central banking at the ECB Forum, together with European Central Bank (ECB) President Christine Lagarde and FOMC Chairman Jerome Powell.