Over the past 24 to 48 hours, the GBP/USD currency pair has experienced notable volatility, closing yesterday around 1.35809, with a modest rebound from earlier lows. The week began with a bearish gap due to a firmer US dollar, but buyers quickly pushed the pair back up, recovering nearly 50 pips. This movement highlights cautious investor sentiment amid ongoing global political and economic uncertainties.

Latest market news reveals that renewed US-Iran tensions briefly supported the US dollar as a safe haven, alongside a rise in oil prices. However, with no major incidents reported and easing energy concerns, investors rotated out of the dollar and into higher-yielding currencies like the pound. Despite significant losses faced by the ruling party in recent UK local elections, the pound remained resilient, indicating political uncertainty has yet to undermine confidence in the UK’s economic fundamentals.

For the average investor, this means the recent price action in the GBP/USD pair reflects a balance between macroeconomic and geopolitical forces—short-term dollar strength driven by tensions, contrasted by easing risk aversion and stable UK economic prospects supporting the pound. Market participants following GBP/USD should view the current price adjustments as sensitive reactions to the global situation, presenting both challenges and potential opportunities amid this dynamic environment.

Daily Chart

The daily chart shows that after reverting from a recent high at around 1.3601, the price found strong support near 1.34 and began consolidating with an upward bias. The 20-day and 50-day moving averages are aligned bullishly, supporting the upward momentum. The MACD remains positive but shows signs of slowing, while the Bollinger Bands are contracting, suggesting reduced volatility. Overall, the long-term trend remains bullish with price maintaining above the 200-day moving average.

1H Chart

The hourly chart over the last 3-5 days reveals a clear rebound from the 1.35 level, with multiple tests and breaks of the 20-period moving average indicating strengthening short-term bullish pressure. The MACD recently formed a bullish crossover and the RSI is trending higher, confirming buyer control. Price volatility has been contained mostly between 1.353 and 1.362, with the pair currently testing the key resistance at 1.36 in an upward breakout attempt, signaling potential for further gains in the short term.

Technical Trend:  GBPUSD is currently in a steady uptrend with an active recovery phase, best described as decisively bullish. Traders should consider buying dips for potential upside moves.

Technically, GBPUSD has shown a clear bullish reversal pattern this week, highlighted by the recent bullish crossover and Bollinger Band expansion, fueling upward momentum. Attention should focus on the psychological 1.36 level; a sustained break with volume could propel the pair to the 1.365-1.368 resistance zone. The recent bullish engulfing candlestick pattern also strongly supports continued upside within the next 24 hours, indicating strong short-term buying interest.

Today’s economic calendar (GMT+1) features no major events directly impacting GBPUSD. China reported higher than expected inflation and producer price data, which may influence global risk sentiment but have limited immediate impact on GBPUSD. The US has no significant releases today, though housing sales data later this week could affect the dollar. Overall, today’s economic data are unlikely to cause significant GBPUSD volatility.

Resistance & Support

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