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GBPUSD on a daily timeframe
GBPUSD on a daily timeframe shows a significant recovery from its late-2024 lows, with price action rebounding from the 1.2200 area and advancing toward the 1.3428 resistance. Over the past several months, the pair has tested and respected several simple moving averages (SMAs), particularly the 50-day, 100-day, and 200-day SMAs, which are marked with red circles on the chart. These tests illustrate the market's awareness of technical structure, with each pullback into the SMAs acting as a launchpad for higher prices as bullish sentiment gradually returned to the pair.
More recently, the price has entered a tight consolidation range between approximately 1.3254 and 1.3428, shown by the highlighted yellow box on the chart. This range-bound behavior suggests indecision at elevated levels, possibly ahead of key macroeconomic catalysts. Despite the overall uptrend, the lack of breakout from this box indicates a pause in momentum as market participants await clarity on future direction. The horizontal movement within this box has lasted for several weeks, reflecting equilibrium between buying and selling interest.
From an indicator perspective, the Relative Strength Index (RSI) remains neutral at 54.33, indicating neither overbought nor oversold conditions. The Stochastic Oscillator, however, reveals a bearish divergence — while the price has been forming higher highs within the consolidation zone, the oscillator has been forming lower highs. This discrepancy suggests waning momentum and raises the possibility of a short-term pullback or correction if price fails to decisively break above the current resistance range.
The primary scenario envisions a breakout above the 1.3428 resistance zone, targeting the next key level at 1.3600. This would represent a continuation of the bullish trend, supported by the recent golden cross of shorter-term SMAs over longer-term ones. A decisive move above 1.3428 on strong volume would override the bearish divergence and reinforce the prevailing bullish structure heading into the summer months.
Alternatively, a failure to break above 1.3428 followed by a drop below the 1.3254 support line would open the door for a correction toward 1.3074 or even 1.2869, the latter being near the 200-day SMA. Given the proximity of the price to several major moving averages, this scenario would likely coincide with a reversion to mean if bullish momentum falters. This is particularly plausible if upcoming economic data underperforms or geopolitical risks escalate.
GBPUSD stands at a critical juncture, with today's Bank of England decision and potential US-UK trade announcement representing pivotal short-term catalysts. The currency pair has demonstrated resilience despite expectations for monetary policy divergence, with the BoE likely cutting rates while the Fed maintains its cautious stance. Looking ahead, market participants should monitor upcoming inflation reports from both economies, UK growth data, and further developments in global trade relations, particularly as they relate to US tariff policies. While technical indicators suggest some potential for continued upside, the fundamental landscape remains complex, with policy decisions on both sides of the Atlantic likely to drive significant volatility in the weeks ahead.
- Summary:
GBPUSD Recovery: Strong rebound from 1.2200 lows, testing 1.3428 resistance.
- Consolidation Range: Currently ranging between 1.3254–1.3428, indicating indecision.
- Technical Indicators: Neutral RSI, bearish divergence in Stochastic Oscillator suggesting potential pullback.
- Breakout Scenario: A breakout above 1.3428 could target 1.3600, supported by SMA golden cross.
- Key Catalysts: Bank of England decision and US-UK trade updates could drive significant volatility.
