- The GBP/USD pair is rising from the daily low of 1.2707 and is trading above the 1.2800 level.
- Reclaimed key resistance levels: 50-DMA at 1.2787 and 1.2800; next targets are 1.2860, 1.2900 and 1.2950.
- If GBP/USD falls below 1.2800, it could trade in the 1.2800-1.2700 range, with further support at the 100-DMA (1.2683).
Sterling rose sharply against the US dollar after recent economic data from the United States (US) sparked speculation that the US Federal Reserve could cut interest rates sooner than expected. GBP/USD is trading at 1.2833 after hitting an intraday low of 1.2707.
The greenback is under attack, given the July ISM Manufacturing PMI fell to its lowest level since December 2023 and Nonfarm Payrolls missed its target. Market participants have begun pricing in a larger rate cut at the upcoming September meeting.
GBP/USD Price Analysis: Technical Outlook
After diving all week, GBP/USD has reclaimed key resistance levels such as the 50-day moving average (DMA) at 1.2787 and 1.2800. Momentum has shifted in favor of buyers as the Relative Strength Index (RSI) has turned bullish
If GBP/USD closes above 1.2800, it could pave the way for a test of the June 12 high at 1.2860 and reveal the psychological value of 1.2900. Beyond this level, further growth is in sight, with the next stop being 1.2950, ​​which has capped the price action for four more days before buyers could challenge 1.3000.
Conversely, if sellers pull GBP/USD below 1.2800, then the pair could hold within the 1.2800-1.2700 range. If it breaks, it would expose the 100-DMA at 1.2683.
