**Pound Sterling Price News and Forecast: GBP/USD Trades with Mild Gains Around 1.3440 in Monday’s Session**
*Adapted from original reporting by Haresh Menghani, FXStreet*
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The British Pound saw a cautious upward movement in the early trading hours of Monday, with GBP/USD gaining traction around the 1.3440 mark. The pair is reflecting the delicate interplay between risk appetite in global markets, developments on the UK political and economic front, and evolving expectations regarding Federal Reserve interest rate policy. Here, we break down the drivers, technical analysis, and what traders should keep in mind as the new week unfolds.
## Overview of Key Drivers
### 1. Global Market Sentiment
– **Risk Appetite and Global Cues:**
Global equities showed signs of stabilization following last week’s volatility, improving market risk sentiment. Traders drew confidence from recent reports suggesting that the worst of the banking sector turmoil in the US and Europe might be behind us for now.
– **Safe-Haven Dollar Under Pressure:**
As investors rotated out of the safe-haven US Dollar, risk-associated currencies such as the British Pound and the Euro garnered renewed support. This move reflects a moderate unwinding of positions that were built up during the recent risk-off environment.
### 2. US Dollar Dynamics
– **Federal Reserve Interest Rate Path:**
Market participants remain attuned to signals from Federal Reserve officials regarding the pathway for interest rates. The Fed is positioned firmly to fight inflation, but traders are parsing each communication for indications about when the tightening cycle may pause or even reverse.
– **US Economic Data:**
Last week’s mixed US data releases, including a softer-than-anticipated Nonfarm Payrolls print and signs of moderating inflation, have sown doubt about continued aggressive Fed policy, keeping a lid on Dollar strength.
### 3. United Kingdom Economic and Political Developments
– **UK Economic Releases:**
The UK’s economic outlook remains mixed. Recent GDP and employment statistics have delivered little by way of surprise but have shown just enough resilience to avoid any immediate concerns over recession.
– **Bank of England Policy Stance:**
The Bank of England recently delivered a split decision, keeping policy rates on hold amidst persistent inflationary pressure but signaling that further hikes are possible if circumstances warrant.
– **UK Political Climate:**
A stable but unexciting political environment supports the Pound. There are no major political risks on the immediate horizon, allowing markets to focus more closely on economic fundamentals and central bank policy.
## Technical Analysis: GBP/USD in Focus
### 1. Recent Price Action
– **Consolidation Pattern:**
GBP/USD has been trading within a tight band since the early April correction, repeatedly testing both its upside resistance and downside support.
– **Session Highs and Lows:**
Monday’s session saw the pair initially touch the 1.3440 region, indicating mild bullish pressure but with no convincing break above previous highs.
### 2. Technical Levels to Watch
– **Immediate Support:**
The zone near 1.3400 offers the first layer of support. Dips into this region have recently been met with buying interest.
– **Key Resistance Zone:**
On the upside, the 1.3475 to 1.3500 area forms a main barrier. A clear move above this zone could pave the way for further gains towards the 1.3550 and 1.3600 marks.
– **Moving Averages:**
The 50-day moving average presently hovers near the 1.3460 mark. This moving average, if broken and sustained, could embolden momentum traders who remain cautious otherwise.
### 3. Trend Indicators
– **RSI (Relative Strength Index):**
The daily RSI is just above the midline, suggesting neither overbought nor oversold conditions, but showing a gradual recovery in bullish sentiment.
Read more on GBP/USD trading.