**GBP/USD Price Forecast: Sterling Jumps Above 1.3500 USD**
*By [Original Author, TradingNews.com](https://www.tradingnews.com/news/gbp-usd-price-forecast-sterling-jumps-above-13500-usd)*
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The British pound has staged an impressive rally against the US dollar, ascending above the key psychological level of 1.3500 amid shifts in risk sentiment, economic expectations, and central bank speculation. As market participants navigate an evolving landscape marked by monetary policy decisions and global economic indicators, the GBP/USD pair continues to demand focused attention from traders and investors alike. The following analysis explores the key factors contributing to the pound’s surge, assesses technical levels to watch, and considers what may lie ahead for the world’s oldest currency pair.
## Recent Developments Driving GBP/USD
A combination of bullish factors has fuelled the GBP/USD climb past 1.3500. The narrative includes:
– Growing optimism regarding the UK economic outlook, bolstered by surprisingly robust data prints.
– Dovish signals from the US Federal Reserve, prompting investors to rotate out of the USD.
– Shifting expectations on Bank of England (BoE) policy, especially regarding interest rate hikes to tame persistent inflation.
– Improved risk sentiment across global markets, diminishing the allure of the safe-haven dollar.
### UK Economic Momentum
The UK economy has demonstrated resilience in the face of adversity, with recent releases showing growth exceeding consensus forecasts. Notable indicators include:
– Higher-than-expected GDP growth in the latest quarter, as noted by the Office for National Statistics.
– Strong readings in retail sales, reflecting consumer confidence despite cost-of-living headwinds.
– Ongoing recovery in services, the backbone of the UK economy, as labor shortages ease and demand recovers.
These improvements have helped underpin sterling, providing fundamental support even as Brexit-related uncertainties linger in the background.
### US Dollar Weakness
The US dollar index has stumbled from its recent highs, driven in part by:
– Fed officials signalling a slower pace of interest rate increases as inflationary pressures show tentative signs of easing.
– Market participants pricing in the potential for the Fed to pause or even cut rates later in the year if economic conditions warrant.
– Moderating US economic data, including less robust job growth and weaker manufacturing sector activity.
This environment has created fertile ground for risk-oriented currencies, including the pound, to outperform their US counterpart.
### Bank of England Policy Outlook
Speculation around future BoE interest rate moves remains a crucial driver for GBP volatility. The UK’s persistently high inflation has kept the BoE on a tightening path longer than some global peers. Market analysts note:
– UK headline inflation, while moderating, continues to exceed the BoE’s 2 percent target.
– Several Monetary Policy Committee (MPC) members support additional tightening to anchor expectations.
– The central bank’s communication suggests a “data-dependent” approach, leaving the door open for further rate increases if warranted.
These dynamics keep sterling sensitive to both official policy statements and incoming macroeconomic data.
## Technical Picture for GBP/USD
Sterling’s leap above 1.3500 is technically significant, drawing attention to several key chart levels and patterns. According to price action observed on the daily and weekly timeframes:
### Immediate Support and Resistance
– **Support:** Initial support rests around the 1.3480 region, with further downside cushion noted near 1.3420 (recent swing low).
– **Resistance:** Next resistance stands at 1.3570 (near-term high), followed by a more formidable barrier at 1.3675 (multi-month peak and psychological level).
### Moving Averages
– The pair comfortably trades above both its 50-day and 200-day moving averages, reinforcing the bullish trend and suggesting more upside momentum.
– Analysts observe that the 50-day moving average has recently crossed above the 200-day, forming a so-called “
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