GBP/USD Buyers Push to Extend Uptrend
Market Overview
The British Pound surged to a four-and-a-half-month high against the US Dollar on Tuesday as expectations grew that the Bank of England (BoE) would refrain from cutting interest rates later this week. Meanwhile, Sterling weakened against the Euro, driven by optimism surrounding Germany’s stimulus plans. The Euro’s strength has contributed to a decline in the US Dollar Index, indirectly supporting GBP/USD.
Despite market optimism for the Pound, investors remain cautious ahead of key US economic data, which could influence the Greenback’s trajectory and introduce volatility to the pair’s movement.
Technical Analysis
GBP/USD remains in a medium-term uptrend that began in January 2025. However, the pair faces strong resistance near 1.29983, where price action has stalled amid overbought conditions. Despite this, buyers have attempted to reclaim control, pushing the price back to this resistance level. A sustained breakout above 1.29983 would confirm bullish continuation, with the next upside targets at 1.30067, followed by 1.30175 and 1.30293.
Momentum indicators provide mixed signals. The RSI remains in bullish territory, while MACD shows neutral momentum, suggesting some consolidation before the next directional move. If sellers regain control, a break below 1.29865 could lead to a retest of 1.29673, which would be necessary to signal a potential trend reversal.
Key Technical Levels
- Resistance 1: 1.30067
- Resistance 2: 1.30175
- Resistance 3: 1.30293
- Support 1: 1.29865
- Support 2: 1.29673
Fundamental Drivers
Tuesday’s key US economic releases, including housing market data and industrial production figures, will play a crucial role in shaping market sentiment. Weaker-than-expected results could reinforce US Dollar weakness, benefiting GBP/USD. Conversely, stronger data could limit further gains in the pair by supporting the Greenback.
Market participants will closely monitor BoE policy expectations and broader risk sentiment for additional directional cues.
Conclusion
GBP/USD remains in an uptrend, with buyers targeting 1.30067 and higher. A drop below 1.29673 would challenge the bullish outlook. Upcoming US economic data will be a key driver in determining short-term price direction.
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