**GBP/USD Price Forecast: Sterling Jumps Above 1.3500 USD**
*Based on the original article from TradingNews.com — Author: Mark Collins*
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The British Pound Sterling (GBP) has witnessed a sharp rally against the US Dollar (USD), breaking significantly above the key psychological level of 1.3500. This upward move marks a pivotal shift in the GBP/USD forex pair’s near-term outlook, attracting heightened attention from currency traders, investors, and analysts worldwide.
This article delves into the factors driving Sterling’s surge, provides a detailed technical analysis of the GBP/USD chart, examines key fundamental catalysts, outlines potential risks to the outlook, and considers what may lie ahead for this prominent forex pair.
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## Sterling’s Momentum: What Is Fueling the Rally?
Sterling’s recent leap against the greenback was not a product of a singular development but rather the culmination of several interwoven fundamental and technical factors. Understanding these is essential for assessing how sustainable the current move might be.
### Resilient UK Economic Data
– **Stronger-than-Expected UK Macro Reports**: Recent economic indicators from the UK have surprised positively, from manufacturing and services PMI data to better-than-projected GDP readings.
– **Upbeat Labor Market**: Robust employment numbers and steady wage growth have bolstered confidence in the sustainability of UK consumer spending, providing underlying support for sterling.
– **Cooling Inflation with Growth**: While inflation has moderated, it has not undershot so drastically as to trigger recession fears — helping keep sentiment balanced.
### Central Bank Policy Divergence
– **Bank of England’s Hawkish Tilt**: The Bank of England (BoE) has signaled a willingness to consider further policy tightening if inflationary pressures persist or re-accelerate, contrasting with a U.S. Federal Reserve perceived as more dovish after hinting at pauses and potential rate cuts later in the year.
– **Interest Rate Differentials**: The market’s pricing of future rate moves has shifted in favor of the pound, with traders forecasting less aggressive policy easing in the UK than in the US.
### Weaker US Dollar Backdrop
– **US Economic Slowdown Concerns**: Moderating US economic data, including a softer labor market and signs of cooling consumer confidence, have weighed on the USD.
– **Declining Treasury Yields**: Lower yields on US treasuries make the dollar less attractive relative to other currencies, pushing flows toward the pound.
– **Risk Sentiment Fluctuations**: An improved risk appetite across global markets has nudged investors away from the safe-haven US dollar and toward perceived riskier currencies, adding momentum to cable’s advance.
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## Technical Analysis: Breaking Above 1.3500
A thorough look at the GBP/USD price chart reveals critical technical developments underpinning Sterling’s latest surge.
### Key Technical Breakouts
– **Psychological Level Breached**: 1.3500 has been a notable resistance level over recent months. Bullish momentum saw GBP/USD break and sustain above this hurdle, sparking renewed buying interest.
– **Upward Trend Confirmation**: The pair continues to print higher highs and higher lows, supporting the longer-term uptrend narrative evident since late 2023.
### Critical Moving Averages and Indicators
– **Major Moving Averages**: The move above both the 50-day and 200-day simple moving averages (SMAs) bolsters the case for further upside, with both now acting as dynamic support levels.
– **Momentum Oscillators**:
– **Relative Strength Index (RSI)**: RSI is hovering in bullish territory, though not yet signaling overbought conditions — suggesting room for additional gains.
– **MACD (Moving Average Convergence Divergence)**: MACD remains positive and shows an accelerating bullish crossover.
### Immediate Resistance and Support Levels
– **Key Resistance Levels**:
– Initial resistance now lies near 1.357
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