**GBP/USD Pulls Back Off Session Highs to Trade at About 1.3569**
*Based on reporting by FxDailyReport.com*
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**Overview**
The GBP/USD currency pair experienced a pullback after touching intra-session highs, trading around the 1.3569 mark during the latest session. The movement comes amid a confluence of factors impacting both the British pound and the US dollar, including macroeconomic reports, monetary policy shifts, and broader sentiment on global risk assets.
In this in-depth analysis, we examine the underlying causes of GBP/USD’s performance, technical and fundamental outlooks, and potential direction in the near term. We’ll also cover what traders should monitor ahead to better position themselves in the continually volatile forex landscape.
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**Session Highlights**
– **GBP/USD set a high early in the session but encountered strong resistance near 1.3600.**
– **The pair subsequently lost momentum, falling back toward the mid-1.3500s.**
– **Trading volumes remained consistent as the market digested macroeconomic news from both the UK and the US.**
– **Sentiment shifted as traders re-evaluated positions ahead of key upcoming data.**
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**UK Economic Backdrop**
The British pound’s recent movements have been significantly influenced by domestic economic conditions, the policies of the Bank of England (BoE), and political developments related to Brexit.
##### Key Factors Affecting the GBP:
– **Inflation Concerns:** The latest figures showed that British inflation rates remain above target, triggering speculation about the BoE’s next moves.
– **Bank of England Policy:** Market participants are scrutinizing statements from BoE officials for clues on future rate hikes, with many expecting potential tightening in response to rising price pressures.
– **Labour Market:** Employment data released recently signaled resiliency in some sectors, but supply chain disruptions and energy price inflation remain persistent headwinds.
– **Brexit Legacy:** Lingering uncertainty regarding UK-EU trade relations continues to exert a subtle drag on sterling, especially amid the ongoing Northern Ireland protocol discussions.
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**US Dollar Dynamics**
The movement of the US dollar also played a crucial role in the GBP/USD pair’s fluctuations. The dollar’s strength or weakness is a function of several macroeconomic trends unfolding across the United States.
##### Major Drivers for the USD:
– **Federal Reserve Policy:** The US dollar benefited from hawkish signals from Federal Reserve officials, who indicated that higher interest rates may be necessary to combat persistent inflation.
– Rate hike expectations have risen for the coming months, fueling the greenback’s advance relative to major currencies.
– **Economic Data:** Recent releases, such as robust jobs data and higher-than-expected inflation prints, painted a picture of a resilient US economy despite global uncertainties.
– **Geopolitical Risk Aversion:** The dollar attracted safe-haven inflows as investors grew cautious over geopolitical tensions and uneven post-pandemic recovery trajectories.
– **Bond Yields:** A rise in US Treasury yields boosted the dollar’s appeal over the pound, further pressuring GBP/USD lower.
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**Technical Analysis**
GBP/USD’s pullback from session tops is noteworthy from a technical trading perspective. The chart structure and key support and resistance levels provide signals for potential next moves.
##### Support and Resistance Levels:
– **Immediate Resistance:** 1.3600 remains a notable resistance zone. The market has repeatedly failed to sustain rallies beyond this psychological level.
– **Immediate Support:** The pair found short-term support near 1.3550, with the next significant support at 1.3500.
– **50-day Moving Average:** This technical indicator lies just above current price action, acting as a dynamic area of resistance.
– **Previous Lows:** A decisive breach below the 1.3500 level could pave the way for sharper losses toward 1.3450 and potentially 1.3400.
##### Technical Indicators:
– **Relative Strength Index (RSI):** Read
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