The GBP/USD pair sees a slight pullback, trading around 1.3450 during the early European session on Tuesday. Despite this mild dip, the outlook remains positive for the pair, with technical indicators signaling potential for further gains.
Technical Overview
The key 100-day Exponential Moving Average (EMA) continues to offer strong support, keeping the bullish bias intact. While the pair is consolidating near current levels, the neutral Relative Strength Index (RSI) indicates that further consolidation is possible before any significant move in either direction.
Resistance and Support Levels
The immediate resistance level stands at 1.3585, marking the high from August 13. A decisive break above this resistance could trigger a continuation towards 1.3635, where the upper boundary of the Bollinger Band lies. Beyond that, the next significant resistance level comes in at 1.3752, the high seen in early July.
On the downside, the first support level to monitor is 1.3405, which aligns with the low of August 21. A breach below this support could push GBP/USD lower towards 1.3360, where the 100-day EMA is situated. The crucial support zone lies around 1.3210-1.3200, which encompasses the lower Bollinger Band and the psychological level.
Fundamental Outlook
The potential for a near-term US Dollar (USD) weakness has risen following US President Donald Trump’s announcement to fire Federal Reserve Governor Lisa Cook. This move has stirred concerns over the Fed’s independence, which could undermine the USD’s strength in the coming days.
As the market looks ahead, GBP/USD remains well-positioned for further gains, provided the pair maintains its support above the key 100-day EMA and further bullish momentum is confirmed.
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