**GBP/USD Weekly Outlook: Consolidation Continues Amid Uncertain Breakout**
*This article is based on the analysis from Action Forex, originally authored by ActionForex.com contributors. The insights, forecasts, and technical levels discussed herein are derived from the original source with attribution.*
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## Overview
The GBP/USD pair traded within a relatively tight range this past week, with movements largely confined between established support and resistance levels. The market’s focus is poised between upcoming fundamental events and ongoing technical developments. The pair continues to consolidate, with price action yet to signal a decisive break, keeping traders on alert for potential volatility in the sessions ahead.
### Weekly Performance Summary
– GBP/USD was largely rangebound over the course of the week.
– The pair did not exhibit significant momentum for either a bullish or bearish breakout.
– Market participants are waiting for clearer cues from both economic data and technical signals.
## Technical Analysis
### Key Levels
**Immediate Resistance:**
– 1.2816: The recent near-term high
– 1.2892: The March swing high
**Immediate Support:**
– 1.2633: The recent low
– 1.2517: The 100-day EMA (Exponential Moving Average)
– 1.2445: The significant swing low from May
### Consolidation Pattern
– GBP/USD has been consolidating in a sideway pattern since peaking in March.
– The upper boundary is defined near 1.2892, while the lower boundary stands around 1.2445.
– The current consolidation is considered corrective after the rally from the 1.2298 low in April.
### RSI and Momentum
– Weekly Relative Strength Index (RSI) hovers above 50, suggesting mild positive momentum.
– Momentum indicators do not provide a clear directional bias, reinforcing the consolidation scenario.
### Medium-Term Picture
– On the weekly chart, GBP/USD remains within a medium-term bullish channel.
– The pair is capped by resistance around 1.2892, while significant support remains at 1.2445.
– A clear directional break is needed to confirm the next significant move, either towards a resumption of the uptrend or a shift to a deeper correction.
## Fundamental Backdrop
### UK Economic Landscape
– Recent UK economic data remains mixed, with inflation expectations firmly in focus.
– The Bank of England has signaled caution regarding policy easing, awaiting more data clarity.
– Domestic political developments, especially with UK general elections looming, add another layer of uncertainty to GBP sentiment.
### US Economic Drivers
– US economic indicators, notably labor market data and inflation readings, continue to wield a strong influence over dollar movement.
– The Federal Reserve’s messaging remains data-dependent, with market pricing for interest rate cuts being revised regularly in reaction to economic prints.
– US Treasury yields and broader risk sentiment also factor heavily into GBP/USD directionality.
### Event Risks Ahead
– Key UK data releases (GDP, CPI, labor market numbers) are eyed for short-term volatility triggers.
– In the US, Federal Reserve communications and inflation updates remain the primary events to watch.
– Global risk appetite and geopolitical developments can contribute to sudden shifts in currency pairs, GB/USD included.
## Short-Term Forecast Scenario
### Bullish Case
– A break above 1.2816 paves the way for a retest of 1.2892 resistance.
– Sustained strength above 1.2892 would argue for a resumption of the uptrend from April’s 1.2298 low.
– Further upside extension could see GBP/USD targeting the psychological 1.3000 barrier, and then possibly the March 2023 high of 1.3141.
**Key Conditions for a Bullish Continuation**
– UK economic data surprises to the upside.
– Dovish shifts from the Federal Reserve or weaker US data.
– Strong risk appetite and stable political environment in the UK.
### Bearish
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