Over the past 24 to 48 hours, GBP/USD has maintained its upward trend, trading steadily between 1.3430 and 1.3450, slightly above yesterday’s closing price of 1.34376. This rally has been primarily driven by the US President Trump’s latest tariff threats toward Europe, which weakened the US dollar broadly and propelled the pound higher. Heightened concerns over US-EU trade tensions have led to selling pressure on the dollar, pushing GBP/USD to a one-week high.

Additionally, investors are awaiting UK consumer price index (CPI) data, with expectations that persistent inflationary pressures may prompt the Bank of England to maintain a cautious monetary policy stance. Despite mixed signals from the UK labor market, sticky wages remain a concern, keeping a bullish outlook on the pound. Overall, the last two days’ market action has been influenced by US tariff policy uncertainties and upcoming UK inflation figures, both playing key roles in supporting GBP/USD’s positive momentum.

For the average investor, this means that amid international trade tensions and macroeconomic data flow, GBP/USD is likely to find steady support and could potentially break above recent highs in the near term. Holding this currency pair offers potential gains from the dollar’s weakness and the pound’s relative strength.

Daily Chart

The daily chart reveals a steady upward trend for GBPUSD, rising from around 1.33 and breaking above both the 50-day moving average (~1.338) and 200-day moving average (~1.341). The Bollinger Bands show an expansion following a period of contraction, with price hugging the upper band, signaling strong bullish momentum. The MACD indicator confirms this with the fast line above the slow line, suggesting established medium to long-term strength and key resistance levels at 1.3450 to 1.3485.

1H Chart

On the hourly chart, GBPUSD has been oscillating upward within the 1.34 to 1.345 range over the last 3-5 days. The 5- and 20-period moving averages have crossed with price holding above both, indicating short-term bullish momentum. The MACD histogram is expanding positively while RSI sits near 60, implying further upside room. A bullish engulfing candlestick formed on January 20 indicates renewed buying interest likely to test the 1.345 to 1.348 resistance zone in the next 24 hours.

Technical Trend:  The current trend is decisively bullish, with GBPUSD consistently making higher highs and holding key moving average support levels, signaling strong upward momentum.

Technically, GBPUSD is displaying a strong bullish setup with MACD maintaining a golden cross and price positioned above the mid Bollinger Band on the daily timeframe. This confirms upside momentum and trend continuity. The short-term 4-hour chart supports this outlook with solid buying support and an emerging bullish engulfing candlestick that signals near-term buying strength, highlighting critical resistance between 1.345 and 1.348 which, if breached, could confirm further gains.

Today, the UK releases December Consumer Price Index (CPI), Core CPI, and Retail Price Index (RPI) at 08:00 GMT+1. The market forecasts a slight uptick in headline CPI to 3.3% year-over-year, above the prior 3.2%. These inflation readings are pivotal for GBPUSD, influencing Bank of England rate hike expectations and pound strength. Stronger than expected data could propel GBPUSD higher, while weaker figures might trigger profit-taking or pullback. Other UK releases and ECB speeches have less direct impact today. Traders should prepare for possible volatility around the CPI release.

Resistance & Support

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