**GBP/USD Price Forecast: Pound Sterling at 1.3528 Tests 1.3600**
Original reporting by Liam McDonald, Trading News
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### Introduction
The GBP/USD currency pair, commonly referred to as “Cable” in forex markets, continues to attract significant attention from traders and analysts due to its sensitivity to both economic data and geopolitical events. In the latest move, GBP/USD hovers around 1.3528, daring to challenge the pivotal 1.3600 resistance level. This article provides a detailed analysis of the market dynamics driving this major currency pair, insights into the UK and US economies, technical and fundamental perspectives, and a forward-looking outlook for traders considering their next moves.
### Current Market Overview
As of the latest trading sessions:
– The GBP/USD pair is consolidating near 1.3528, reflecting cautious optimism surrounding the British Pound.
– The prospect of a move toward the psychological 1.3600 barrier is drawing keen interest.
– Market volatility is heightened due to a complex mix of macroeconomic releases, central bank signals, and ongoing Brexit aftershocks.
### Key Drivers Behind GBP/USD Performance
#### 1. UK Economic Data
Recent UK macroeconomic figures have provided a mixed picture:
– **Inflation**: The latest Consumer Price Index readings indicate persistent inflationary pressures above the Bank of England’s (BoE) 2 percent target.
– **GDP Growth**: Easing restrictions and steady consumer demand have contributed to moderate GDP expansion, but fears remain amid global growth concerns.
– **Labor Market**: Strong labor demand has been counterbalanced by wage pressures and skills shortages.
– **Retail Sales**: While still positive, retail sales growth is slowing, reflecting broader cost-of-living challenges.
#### 2. Bank of England Policy
The BoE’s stance continues to influence the Pound:
– The latest Monetary Policy Committee (MPC) meeting resulted in a decision to maintain the key interest rate at 0.5 percent, though guidance suggested future hikes might be needed.
– Committee members are closely monitoring energy prices, supply chain constraints, and wage settlements for evidence to justify the next move.
– Market participants anticipate that even a modest rate hike could provide significant support for Sterling, especially if the European Central Bank and the US Federal Reserve remain dovish.
#### 3. UK Political and Brexit Developments
– Negotiations concerning post-Brexit trade relations and the Northern Ireland protocol continue to create uncertainty.
– Investors remain wary of any signals suggesting new tariffs or regulatory divergence between the UK and Europe.
– Political headlines surrounding the UK’s stability post-pandemic have, at times, weighed on Sterling.
#### 4. US Economic Outlook
The US Dollar’s performance against the Pound is shaped by several factors:
– The Federal Reserve’s pivot toward a more hawkish stance, signaling rate hikes in response to rising US inflation.
– Nonfarm payrolls and unemployment data have shown resilience, reinforcing the case for policy tightening.
– Geopolitical factors, including US-China relations and global risk sentiment, have intermittently supported the safe-haven Dollar.
#### 5. Market Sentiment
– Risk appetite has been swinging due to ongoing COVID-19 variants and global monetary policy speculation.
– The GBP/USD pair is sensitive to risk-off moves, often leading to Dollar strength during market turbulence.
### Technical Analysis: GBP/USD at Pivotal Levels
Technical traders are paying close attention to the current chart setup:
– **Support Zones**: Firm support is noted at 1.3450 and 1.3400, with buyers historically emerging at these levels.
– **Resistance Targets**: The 1.3600 handle is regarded as psychological resistance, followed by 1.3650 and 1.3700 should momentum persist.
– **Moving Averages**: The pair is hovering above its 20- and 50-day moving averages, suggesting a cautiously bullish trend.
– **RSI (
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