Fundamental Overview

GBP/USD registered strong daily gains on Wednesday and continued to stretch higher early Thursday. The pair stays in positive territory above 1.2650 in the European session and the technical outlook points to a bullish tilt in the near term.

The broad-based selling pressure surrounding the US Dollar (USD) provided a boost to GBP/USD midweek. Once the pair climbed above the 200-day Simple Moving Average (SMA) at 1.2590, technical buyers took action, allowing the pair to extend its rally.

Meanwhile, the data from the US showed that the economic activity in the service sector expanded at a softening pace in March, with the ISM Services PMI declining to 51.4 from 52.6 in February. Moreover, the Prices Paid Index fell to 53.4 from 58.6 in the same period, showing a pullback in the sector's input inflation.

At the time of press, US stock index futures were up between 0.3% and 0.45% on the day. In case risk flows dominate the action in the second half of the day, the USD could have a hard time finding demand.

The US economic calendar will offer weekly Initial Jobless Claims data. Ahead of Friday's Nonfarm Payroll (NFP) report for March, however, investors could refrain from taking large positions based on this data alone.