# GBP/USD: Buy Day in Play
*Based on the analysis by Axel Rudolph, Senior Market Analyst at FXStreet, with added insights from related financial sources*
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## Introduction
The GBP/USD currency pair, known as “Cable,” has been at the center of focus for forex traders due to recent macroeconomic data and shifting market sentiment. Axel Rudolph, Senior Market Analyst at FXStreet, in his article “GBP/USD: Buy Day in Play,” analyses the current technical and fundamental factors influencing the pair. This comprehensive rewrite expands upon Rudolph’s insights and provides a thorough guide for traders and investors looking to navigate the current GBP/USD market environment.
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## Current Market Environment
### Economic Background
– The British pound has been demonstrating resilience against the US dollar amid fluctuating market dynamics.
– Inflation readings in the UK surpassed expectations, leading the Bank of England (BoE) to sustain a hawkish tone.
– Recent US economic data, while strong, has not completely erased expectations for Federal Reserve rate cuts within the year.
– Mixed economic signals from both the UK and US have resulted in increased volatility for GBP/USD.
### Central Bank Dynamics
– The Bank of England has signaled a cautious approach to its next interest rate move, citing sticky inflation and resilient wage growth.
– The Federal Reserve, by contrast, maintains a wait-and-see approach. The Fed is likely to only cut rates if inflation cools meaningfully or if growth data sours.
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## GBP/USD Technical Analysis
### Recent Price Movements
– GBP/USD began the week with a bullish undertone, rebounding off recent support near the 1.2650 level.
– The pair consistently found bids on dips, supported by technical and fundamental strength in the pound.
– Price action has gravitated toward the 1.2750–1.2800 resistance zone, marking a significant hurdle for bulls.
### Key Support and Resistance Levels
**Support:**
– 1.2650: Recent swing low and psychological pivot
– 1.2600: Historical demand zone and round number
– 1.2550: Longer-term support level from prior months
**Resistance:**
– 1.2770–1.2800: Multi-week high and area of previous consolidation
– 1.2850: Upper boundary tested in May trading sessions
– 1.3000: Major psychological milestone and year-to-date high
### Chart Structure and Momentum
– The daily chart depicts a bullish reversal pattern confirmed by higher lows from the beginning of the month.
– Moving Averages:
– The 50-day simple moving average (SMA) is rising steadily and is positioned below the current spot price, acting as dynamic support.
– The 200-day SMA remains in a positive trajectory, further encouraging longer-term buyers.
– Relative Strength Index (RSI) is approaching 65, suggesting bullish momentum but warning of possible near-term overextension.
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