**GBP/USD Climbs to 1.3524 as Solid US Data Caps Dollar**
*By FXStreet Team*
The GBP/USD pair saw renewed bullish momentum during the North American session, peaking at 1.3524 amid a dynamic trading environment influenced by economic data releases and global sentiments. While the latest robust US data remained supportive of the dollar, the British pound managed to rally, thanks to optimism over UK economic prospects, favorable market sentiment, and technical factors.
This in-depth analysis explores the intricate drivers of the recent GBP/USD movements, reviews the latest UK and US data, examines short- and medium-term technical levels, and assesses the outlook for the pair as traders and investors position themselves amidst shifting macroeconomic tides.
**Intra-Day Price Action and Overview**
After opening the day with moderate gains in the European session, GBP/USD experienced a sharp upward move, reaching 1.3524—its highest level in recent days. The initial move was attributed to improved risk appetite in global markets and a pullback in US Treasury yields, which momentarily eased support for the dollar. However, the US currency regained some composure following strong economic releases, trimming the pound’s advance but failing to fully reverse it.
– Intraday range: GBP/USD rallied from lows near 1.3440 to highs at 1.3524
– Near-term resistance encountered at 1.3540, followed by 1.3575
– Immediate support seen at 1.3470, with further downside potential towards 1.3420 if bearish momentum strengthens
This movement reflects a tug-of-war between dollar-supportive US data and pro-cyclical flows favoring the pound, especially as market participants anticipate shifts in both Federal Reserve and Bank of England policy approaches.
**US Data Caps Dollar Gains**
The greenback has been buoyed in recent sessions by a string of positive economic data pointing to solid US growth and a resilient labor market. The latest releases on durable goods orders and consumer confidence have exceeded market expectations, reinforcing the narrative of ongoing economic momentum.
Key points from the US economic calendar:
– Durable Goods Orders: The Commerce Department reported that orders increased more than expected, suggesting robust demand for capital equipment and an optimistic business outlook despite ongoing supply chain challenges.
– Consumer Confidence Index: The Conference Board’s gauge rose sharply, reflecting growing optimism among American households regarding income prospects, hiring trends, and future economic activity.
– Initial Jobless Claims: Figures remained close to multi-decade lows, underscoring labor market strength and supporting expectations for the Fed’s gradual normalization path.
The market’s reaction to these reports was initially dollar-positive, with a brief spike in the US Dollar Index (DXY), before broader risk-on sentiment and profit-taking led to a limited retracement.
– US 10-Year Treasury yields peaked near 1.30 percent before easing back, helping high-beta currencies like GBP to recover lost ground against the dollar.
– The mixed reaction underscores uncertainty about the direction and speed of future US rate hikes.
**UK Economic Sentiment Supports Sterling**
While the pound’s performance is often dominated by headlines from across the Atlantic, a variety of domestic factors have also contributed to GBP/USD’s ability to withstand dollar strength.
Key drivers behind sterling’s resilience:
– UK Growth Optimism: Forward-looking indicators, including improving business and consumer confidence, suggest that the UK economy remains on track for a robust recovery. The latest PMIs have shown expansion in both the manufacturing and services sectors.
– Easing Political Concerns: Reduced Brexit-related tensions and an increasingly stable political environment in Westminster have alleviated investor concerns about sudden policy shocks.
– Bank of England Outlook: Recent BOE meeting minutes and comments from policymakers have hinted at a willingness to start tightening policy earlier if inflation remains persistently above target. This underpins medium-term support for the pound.
– Vaccine Progress: The UK’s ongoing vaccination campaign and easing of restrictions continue to support domestic demand.
Despite these positives, lingering
Read more on GBP/USD trading.