GBP/USD Holds Firm Above 100-Day EMA, Eyes 1.3588 as Risk Sentiment Improves

The British Pound (GBP) continues to gain modest ground against the US Dollar (USD) during Monday’s Asian session, trading near 1.3440. The pair maintains its bullish posture above the 100-day Exponential Moving Average (EMA), supported by a boost in risk appetite following the newly established US-EU trade deal.

Pound Sterling Gains Amid Global Risk-On Mood

The breakthrough trade agreement between the United States and the European Union has eased global trade tensions, igniting a fresh wave of risk-on sentiment in currency markets. This optimism supports the GBP/USD pair, despite cautious anticipation surrounding the US Federal Reserve’s interest rate decision scheduled for Wednesday. The Fed is widely expected to keep interest rates unchanged, but market participants will be watching the accompanying press conference for any signals on future policy direction.

Technical Outlook: Bullish Bias Intact but Momentum Slows

From a technical perspective, GBP/USD retains its bullish tone as long as it stays above the 100-day EMA. However, the 14-day Relative Strength Index (RSI) remains below the neutral 50 level, currently near 43.25, hinting at limited upside momentum in the immediate term.

Key Resistance Levels:

• 1.3588 – High from July 24
• 1.3681 – July 4 swing high
• 1.3725 – Upper boundary of the Bollinger Band

Key Support Levels:

• 1.3365 – Low from July 16
• 1.3330 – Lower Bollinger Band limit
• 1.3236 – May 8 low

What to Watch

A sustained move above 1.3588 could encourage further gains toward the 1.3680-1.3725 resistance zone. On the flip side, a break below 1.3365 would expose the pair to deeper support near 1.3236.

As the week unfolds, GBP/USD traders will remain focused on Fed policy signals and global macro developments that could influence overall sentiment and the demand for the US Dollar.

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