GBPUSD is showing bullish momentum as it trades at 1.34264, currently holding above the 38.2% Fibonacci retracement level at 1.33873.
The pair has been carving out an ascending trendline since early May, which has provided solid support during recent pullbacks. Price action reveals that the pair has consolidated slightly but remains in a favorable position above key support levels.
Looking at the moving averages, the 100 SMA (blue line) is positioned above the 200 SMA (red line), confirming that the path of least resistance is to the upside. This arrangement of moving averages suggests that buyers maintain control of the broader trend, despite any short-term fluctuations.
The stochastic oscillator is moving down from the overbought region, indicating that a temporary pullback might be in progress. However, it remains in neutral territory, suggesting that selling pressure isn’t overwhelming. This technical setup provides room for potential consolidation before the next leg higher.
Meanwhile, the RSI is hovering in the midrange, neither overbought nor oversold, giving bulls ample opportunity to regain momentum without immediately facing resistance from overbought conditions.
If the current support at the 38.2% Fibonacci level (1.33873) holds, GBPUSD could target the recent high around 1.34688, followed by potential resistance at 1.35000. A break above these levels would confirm the continuation of the broader uptrend.
On the downside, immediate support exists at the 50% Fibonacci level (1.33621), with additional cushioning at the 61.8% level (1.33369). The ascending trendline provides further support, suggesting that pullbacks could be seen as buying opportunities as long as this structure remains intact.
Traders should monitor upcoming economic data releases from both the UK and US, as these will likely influence near-term price action in this currency pair. Earlier in the week, stronger than expected UK CPI data dashed hopes of an immediate rate cut from the Bank of England.
Meanwhile, the “Sell America” trade still seems to be in play after the U.S. underwent a disappointing Treasury auction as the vote on Trump’s tax proposals looms.