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The GBP/USD pair has kicked off the trading week on a strong note, revisiting the 1.3200 level as the British pound extends its bullish run. Fueled by persistent weakness in the US dollar, the so-called “Cable” has notched its fifth consecutive daily advance, reaching multi-day highs near the 1.3200 mark. This upward momentum is underpinned by a combination of declining US yields and a broader improvement in risk sentiment, driven in part by eased concerns over President Trump’s tariff policies.
A key driver of the pound’s strength is the ongoing softness in the US dollar, which has been pressured by falling US yields across the curve. Meanwhile, UK 10-year gilt yields have also trended lower, creating a favorable backdrop for GBP/USD. The market’s focus remains squarely on Trump’s tariff proposals, which have been a dominant theme in the foreign exchange universe. Over the weekend, the US President announced that smartphones and computers would be temporarily exempt from the recently proposed tariffs on Chinese imports.
This development has alleviated some of the earlier jitters in the risk-associated space, boosting sentiment and supporting the pound’s rally.
From a technical perspective, GBP/USD appears poised for further gains.
A decisive break above the 2025 peak of 1.3207, recorded on April 3, could pave the way for a test of the 2024 high at 1.3434, seen on September 26. On the downside, key support levels include the critical 200-day Simple Moving Average (SMA) at 1.2817, followed by the April low of 1.2707 and the 100-day SMA at 1.2643. Momentum indicators further reinforce the bullish outlook, with the Relative Strength Index (RSI) hovering near 65, signaling robust upward pressure. Meanwhile, the Average Directional Index (ADX) at around 27 suggests a moderate but steady trend strength.
As GBP/USD continues to capitalize on dollar weakness and a more optimistic tariff outlook, traders will be closely watching for any catalysts that could either propel the pair toward its yearly highs or trigger a pullback to test its key support levels. For now, the pound’s upward trajectory remains firmly intact, with 1.3200 serving as a critical springboard for potential further gains.
