GBP/USD flubs bullish recovery, falls back below key technical levels

• GBP/USD fell back below the 50-day EMA on Wednesday.
• Greenback bidding pressure is back on the rise as investors pivot into risk-off.
• Key US PCE inflation data looms large at the end of the week.

GBP/USD fumbled a near-term bullish correction on Wednesday, slipping back below the 50-day Exponential Moving Average (EMA) near 1.3500 and snapping a two-day winning streak. Broad-market risk appetite sharply reversed course heading through the midweek market session as investors weighed a looming US government shutdown and a rapidly approaching round of key US Personal Consumption Expenditure Price Index (PCE) inflation figures.

Cable tested its lowest bids in three weeks on Wednesday, retreating a little over one-half of one percent through the day's market sessions. GBP/USD has fallen back below the 50-day EMA, but further declines should find a technical floor from the 1.3400 handle.

Coming up: Flurry of mid-tier US data before Friday's PCE inflation print

The UK side of the week's data docket is functionally empty, leaving a wide swath of US releases in the driver's seat. Durable Goods Orders, weekly Initial Jobless Claims, and a flurry of speeches from Federal Reserve (Fed) policymakers will great investors on Thursday, but the key datapoint will be quarterly US Gross Domestic Product (GDP) growth, forecast to hold steady at 3.3% QoQ on an annualized basis.

The US's latest round of Personal Consumption Expenditures Price Index (PCE) inflation is due on Friday, and investors will be looking to see if enough businesses are letting themselves get squeezed out of their own profit margins to avoid passing on too much of their rapidly rising tariff costs directly onto consumers too quickly.

GBP/USD daily chart