**GBP/USD Weekly Outlook: Analysis and Projections**
*Based on the original work by ActionForex.com*
### Overview
The GBP/USD currency pair drew notable attention during the past week as it faced significant resistance and showcased an ambivalent direction. While underlying momentum remains intact, the pair’s future trajectory will be shaped by both technical and fundamental dynamics. The following analysis delves into multiple aspects, including recent price action, key technical levels, macroeconomic influences, and potential price scenarios for the upcoming sessions.
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### Weekly Recap and Recent Price Action
– GBP/USD displayed a moderate uptrend throughout much of last week.
– The pair encountered resistance at critical medium-term highs and struggled to break through.
– Despite multiple bullish attempts, gains were capped as sellers stepped in near the 1.2850 level.
– The structure hinted at consolidation, with daily candles marked by wicks, suggesting indecision.
– By the end of the week, GBP/USD closed marginally higher, maintaining a favorable tone but failing to deliver a decisive breakout.
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### Key Technical Highlights
#### 1. Support and Resistance Levels
– **Immediate Resistance:** The ceiling for the week was established near 1.2850, aligning with swings seen in late 2023 and early 2024.
– **Secondary Resistance:** If buyers gain momentum, 1.3000 emerges as the next major barrier, a psychological level as well as a technical one.
– **Immediate Support:** The first layer of demand hovers around 1.2610, coinciding with recent demand zones and the 21-day simple moving average.
– **Deeper Supports:** Slippage below 1.2610 would bring 1.2500 into play, functioning as both psychological support and late-March swing low.
#### 2. Moving Averages
– The 55-day EMA currently trails beneath the spot price, reinforcing medium-term bullish sentiment.
– The 200-day SMA underpins at lower support levels, defining the broader bullish or bearish bias.
#### 3. Oscillator and Momentum Readings
– The daily RSI remained neutral-to-slightly-bullish, failing to reach overbought thresholds.
– MACD analysis showed positive histogram bars, though with waning momentum as the week progressed.
– These momentum indicators suggest that while the bullish trend remains valid, further progress will require a fresh catalyst.
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### Macro Fundamentals Affecting the Pair
#### 1. UK Economic Data
– British inflation has shown mixed results, with recent CPI figures stalling but not contracting.
– Wage growth remains persistent, complicating the Bank of England’s path to policy normalization.
– Retail and GDP data surprised to the upside, supporting Sterling despite broader global uncertainty.
#### 2. US Dollar Dynamics
– The USD remains influenced by the Federal Reserve’s measured guidance on rate cuts.
– US labor market figures and CPI reports continue to inform risk sentiment and market positioning.
– Broader risk-off events have prompted only limited USD demand, as markets price in a more dovish Fed stance over the coming quarters.
#### 3. Central Bank Policy
– The market expects the Federal Reserve to begin cutting rates later in 2024.
– The Bank of England, while also positioned for future easing, faces domestic inflation pressures that justify its hesitancy to cut aggressively.
– Interest rate differentials and guidance remain pivotal, with market participants scrutinizing every central bank statement and economic release for rate clues.
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### Technical Scenarios
#### Case 1: Bullish Continuation Scenario
– If GBP/USD breaks decisively above 1.2850, bulls could target 1.3000 in rapid succession.
– Sustained trading above this level might open the floor for multi-month highs towards the 1.3150 region.
– Key triggers would include positive UK data, dovish Fed communications, or hawkish BOE rhetoric.
#### Case 2: Bearish Reversal Scenario
– Failure
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