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GBP/USD’s bullish run shows no signs of abating. The pair continued its upward trajectory on Tuesday, gaining 0.32% to reach 1.3030, inching closer to mid-July highs. This sustained upward momentum is evident in the recent trading sessions.
The next hurdle for GBP/USD lies at 1.3100. If the pair can break through this resistance level, it could pave the way for further gains towards 1.3150. However, support levels at 1.2900 and 1.2850 remain crucial. A break below 1.2900 could signal a potential reversal of the upward trend.
The Fed’s recent stance has provided tailwinds for the pound. While the Fed has indicated a potential pause in rate hikes, the ongoing strength of the U.S. economy has raised expectations for future tightening. This divergence in monetary policies between the U.S. and the UK has favored the pound.
Additionally, the Bank of England’s (BoE) hawkish stance has supported the GBP. The BoE has signaled its intention to continue raising interest rates to combat inflation, which has made the pound a more attractive investment. This divergence in monetary policies between the U.S. and the UK has favoured the Sterling.
Technical indicators reinforce the bullish outlook. The Relative Strength Index (RSI) has consistently risen above 50, indicating strong buying pressure. The Moving Average Convergence Divergence (MACD) also supports the bullish bias, with an upward trend and rising green bars. Furthermore, the pair’s trading well above its 20-day Simple Moving Average (SMA) of 1.2830 solidifies the short-term bullish trend.
