GBPUSD: Sterling Finds Its Feet After Testing Key SupportGBPUSD, Cable has been under steady pressure, but buyers are showing signs of life as the pair bounces from a well-defined support zone. With the dollar losing some steam and the pound finding relief from stabilizing UK data, the setup suggests room for a corrective leg higher into the 1.3440–1.3520 region.
Current Bias
Bullish – GBPUSD is attempting a rebound from the lower boundary, with upward momentum aiming at nearby resistance zones.
Key Fundamental Drivers
GBP: The Bank of England has turned more cautious, but wage growth and services inflation remain sticky, limiting the scope for aggressive cuts.
USD: The greenback is weighed down by softening macro data and rising bets on Fed rate cuts into 2026.
Relative Rates: With both the BoE and Fed cautious, short-term momentum depends on US inflation and UK CPI outcomes.
Macro Context
Interest Rates: Fed easing expectations continue to build, while the BoE may be slower to cut given persistent domestic inflation.
Economic Growth: UK growth remains sluggish but resilient, while US growth shows clearer signs of slowdown.
Geopolitical Themes: Dollar safe-haven demand could still spike on trade-war rhetoric and political uncertainty.
Primary Risk to the Trend
A hawkish surprise from the Fed or stronger US jobs/inflation data could halt GBPUSD’s recovery and push the pair back below recent support.
Most Critical Upcoming News/Event
UK GDP and CPI releases.
US PCE inflation and NFP.
Bank of England and Federal Reserve commentary.
Leader/Lagger Dynamics
GBPUSD is often a leader in risk-driven FX flows, especially during periods of heightened USD volatility. Its movements tend to influence GBP crosses like GBPNZD, GBPCAD, and GBPJPY.
Key Levels
Support Levels: 1.3340, 1.3285, 1.3247
Resistance Levels: 1.3442, 1.3526
Stop Loss (SL): 1.3247
Take Profit (TP): 1.3442 (first), 1.3526 (extended)
Summary: Bias and Watchpoints
GBPUSD is currently biased to the upside, with the bounce from 1.3340 suggesting buyers are targeting 1.3442 and potentially 1.3526. The recommended stop loss sits at 1.3247 to protect against downside risk if the dollar strengthens again. The critical watchpoints are US inflation and UK CPI, as these will determine whether sterling can extend its recovery or remain capped within its broader downtrend. For now, the bias leans bullish, but caution remains key with high-impact data ahead.
