Over the past 24 to 48 hours, the GBP/USD exchange rate saw notable volatility, with the pound closing yesterday at 1.36592, slightly up from the previous 1.36414, marking a 0.13% gain. The market reacted significantly to the latest U.S. data, especially disappointing U.S. retail sales figures, which weighed on the dollar. This shifted traders’ outlook on the greenback and allowed the British pound to show relative strength during this period.

Additionally, news that China instructed banks to reduce their holdings of U.S. Treasuries further pressured the dollar, pushing GBP/USD higher. For the average investor, this means the fundamental support for the dollar weakened, giving the pound upward momentum. In simpler terms, the combined domestic and international negative factors for the dollar diminished its value and created room for the pound to rally.

Daily Chart

The daily chart illustrates a clear uptrend in GBPUSD, climbing steadily from the yearly low around 1.2375 to over 1.38 recently. Prices remain comfortably above the 50-day and 200-day moving averages, affirming strong bullish momentum over the medium term. Bollinger Bands show price action near the upper band, indicating rising volatility. The MACD remains positive and suggests strengthening momentum. Overall, the daily technicals favor continued upside potential for GBPUSD as investor confidence builds.

1H Chart

The hourly chart over the last 3-5 days shows active battlegrounds between bulls and bears, with GBPUSD repeatedly testing support near 1.3750 before bouncing higher. A bullish golden cross in short-term moving averages signals growing upward pressure. The MACD indicates increasing bullish momentum as the fast line crosses above the slow line. Bollinger Bands are expanding following a period of contraction, pointing to heightened volatility and trading opportunities. The recent bullish engulfing candlestick pattern suggests further gains in the next 24 hours.

Technical Trend:  Decisively Bullish

Technically, GBPUSD’s recent breakthrough above the 1.3800 resistance level and subsequent hold denote strong bullish intent. The MACD bullish crossover alongside expanding Bollinger Bands signal potential continuation of the upward trend. The hourly bullish engulfing candlestick formation presents an immediate buy signal for short-term traders. The golden cross among short-term moving averages consolidates momentum gains. Traders should watch the critical 14:30 U.S. employment data as a likely trigger for next directional moves. Despite some macro uncertainty, the technical setup currently favors long positions.

Today’s GMT+1 economic calendar highlights several key U.S. employment figures releasing at 14:30, including the unemployment rate, Non-Farm Employment Change, average hourly earnings, and private payrolls. These will directly impact GBPUSD, with better than expected data likely to strengthen the dollar and pressure GBPUSD lower, whereas weaker data should favor further gains in the pair. China’s January CPI and PPI show easing inflation, adding a nuanced background to market sentiment. No other major immediate UK-specific economic events are scheduled today.

Resistance & Support

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