GBP/USD Forecast: Pound stays vulnerable despite sellers' hesitancy

• GBP/USD has managed to regain its traction before testing 1.3500.
• Risk-averse market environment could make it difficult for the pair to push higher.
• Dollar consolidates Thursday's gains as US T-bond yields retreat.

GBP/USD has reversed its direction and declined toward 1.3500 after rising to a fresh multi-week high above 1.3600 on Thursday. Although the pair seems to have shaken off the bearish pressure in the early European session on Friday, it stays vulnerable amid souring market mood and renewed dollar strength.

On Thursday, the US Bureau of Labor Statistics announced that the Consumer Price Index (CPI) jumped to its highest level since 1982 at 7.5% on a yearly basis in January. The US Dollar Index (DXY), which tracks the greenback's performance against a basket of six major currencies, advanced to its highest level in a week with the initial reaction and forced GBP/USD to edge lower.

Meanwhile, the benchmark 10-year US Treasury bond yield climbed above the key 2% mark on Thursday, providing an additional boost to the dollar. With the 10-year yield retreating modestly ahead of the American session, the DXY is consolidating its gains, allowing GBP/USD to stay in its daily range.

Nevertheless, the UK's FTSE 100 Index is down 0.9% and US stocks futures indexes are losing between 0.35% and 0.6%, suggesting that the risk-averse market environment could make it difficult for GBP/USD to gather bullish momentum.

Earlier in the day, the data published by the UK's Office for National Statistics (ONS) revealed that the UK economy grew by 1% on a quarterly basis in the fourth quarter. This reading came in slightly lower than the market expectation of 1.1% but failed to trigger a noticeable market reaction.

Later in the session, the University of Michigan will publish the preliminary Consumer Sentiment Index data for February. Market participants will pay close attention to US T-bond yields as well.

GBP/USD Technical Analysis

The near-term technical outlook shows that GBP/USD is struggling to find direction with the Relative Strength Index (RSI) indicator on the four-hour chart staying close to 50.

In order to push higher toward 1.3600 (psychological level) and 1.3620 (static level), the pair needs to rise above 1.3560 (Fibonacci 23.6% retracement level of the latest uptrend) and start using that level as support. 

On the downside, 1.3520 (Fibonacci 38.2% retracement, 100-period SMA) aligns as the next bearish target. In case a four-hour candle closes below that level, additional losses toward 1.3500 (psychological level, Fibonacci 50% retracement) and 1.3460 (Fibonacci 61.8% retracement) could be witnessed.