**GBP/USD Bounces Off Session Lows to Trade at Key Resistance Near 1.2700**
*By FXStreet Team, adapted from Forex Factory*
The GBP/USD currency pair, commonly known as “Cable,” experienced a notable rebound from earlier session lows, rising to challenge the resistance area near 1.2700 during the most recent trading period. The pair’s movement comes amid a backdrop of mixed macroeconomic data, ongoing central bank deliberations, and shifting sentiment in global risk markets. This article breaks down the latest price action, technical outlook, and fundamental factors influencing GBP/USD, offering traders a comprehensive guide to the current landscape.
## Recent Price Action
During the latest trading session, GBP/USD dipped to intraday lows close to 1.2660 before finding support and staging an upward swing toward the psychological barrier at 1.2700. The pair’s initial losses were spurred by a broad-based dollar recovery, supported by stronger-than-expected US macro releases and a cautiously optimistic Federal Reserve tone. However, renewed sterling buying interest, alongside a pullback in the US dollar, underpinned GBP/USD’s climb in the latter stages of trade.
### Key Developments Driving Intraday Moves
– **US Data Releases:** Unexpectedly solid US economic indicators, particularly within the labor and service sectors, provided an early lift to USD and pressured cable lower.
– **Risk Appetite:** Ebb-and-flow in global equity markets influenced broader risk sentiment, affecting flows into safe-haven currencies like the US dollar and risk-sensitive ones like the pound.
– **Technical Support:** GBP/USD rebounded after testing support at the 1.2660 area, a region previously marked by buying interest.
## Technical Analysis
Technically, GBP/USD remains confined within a broader sideways range, but recent price action suggests an emerging battle around the 1.2700 resistance area. Here’s a breakdown of key levels and chart signals:
### Support and Resistance
– **Immediate Support:** The 1.2660-1.2650 zone has repeatedly arrested declines.
– **Immediate Resistance:** 1.2700 serves as a psychological and technical barrier, previously capping upside attempts.
– **Next Key Levels:** On sustained strength, upside targets include 1.2730 (recent swing high) and 1.2760 (multi-week resistance). On weakness, 1.2620 and the round number 1.2600 are in focus.
### Momentum Indicators
– The Relative Strength Index (RSI) on the four-hour chart hovers around the neutral 50 level, reflecting a lack of clear directional momentum.
– Moving average convergence divergence (MACD) signals indecision, with flat lines and weak crossovers.
– Price action remains above the 50-period simple moving average (SMA), signaling underlying near-term support, but closings below it could invite supply.
### Chart Patterns
– **Range-Bound Trading:** GBP/USD continues to oscillate between roughly 1.2600 and 1.2730, reflecting market indecision.
– **Potential Breakout:** A definitive move above 1.2700 could pave the way for bulls to target levels near 1.2800, while a drop below recent lows would embolden sellers to revisit the 1.2600 region.
## Fundamental Drivers
GBP/USD’s trajectory is being shaped by competing economic and policy signals from both sides of the Atlantic. The recent bounce in cable is a function of both domestic UK factors and shifting market perceptions of US policy.
### UK Economic Picture
– **Growth Prospects:** While the British economy narrowly avoided recession during the previous quarter, activity data remain tepid, capping sterling strength.
– **Inflation Trends:** UK inflation continues to decelerate from its multi-decade highs, but remains above the Bank of England (BoE) target, keeping hawkish policy chatter alive.
– **Bank of England Stance:** The BoE’s tone
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