GBP/USD:FUNDAMENTAL INFOS + TECHNICAL HARMONIC PATTERN ANALYSIS

GBP/USD has lost its traction after testing 1.3200.
Pound can capitalize on risk flows on de-escalation of Russia-Ukraine conflict.
Sellers could take action in case GBP/USD fails to hold above 1.3160.
Fueled by the improving market mood, GBP/USD has staged a decisive recovery toward 1.3200 early Thursday. With investors adopting a cautious stance while waiting for headlines from the meeting between the Russian and Ukrainian foreign ministers, however, the pair has lost its bullish momentum. The technical picture doesn't yet point to a bullish tilt in the near-term outlook but the British pound could gather strength in case risk flows start to dominate the markets.

Ukrainian President Volodymyr Velenskyy told the German newspaper Bild late Wednesday that the aim of Thursday's talks was to end the war. Zelenskyy further added that they were willing to make concessions but Russian news outlets noted that Russia would not concede anything at the negotiation table.


Investors are yet to be convinced that there will be a diplomatic solution to the Russia-Ukraine conflict and the recent market action reflects this view. The UK's FTSE 100 Index is already down 1% on the day and the US Dollar Index, which lost 1% on Wednesday, is up 0.3%.

Later in the session, the February Consumer Price Index (CPI) data will be looked upon for fresh impetus. Annual CPI inflation is forecast to climb to a new multi-decade high of 7.9% from 7.5%. A stronger-than-expected CPI reading could provide an additional boost to the greenback but the pair's action is likely to be driven by the changes in risk perception.

The dollar is likely to continue to outperform its rivals and drag GBP/USD lower in case Russia and Ukraine fail to make progress and vice versa.