**GBP/USD Tests 1.35 as Cable Tilts Upward**
*Adapted from the original article by FXStreet’s analysts.*
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### Introduction
The British pound (GBP) has demonstrated notable upward momentum against the US dollar (USD), with the GBP/USD pair recently testing the 1.35 mark. The pair’s rally is reflective of broader trends in currency markets, as well as shifting underlying macroeconomic fundamentals in both the United Kingdom and the United States. Investors and traders are now closely watching key levels and indicators to gauge whether the bullish sentiment will continue or give way to a reversal. This in-depth analysis examines the latest price action, the fundamental forces in play, and the potential outlook for the pair.
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### GBP/USD Surge: Key Drivers Behind the Move
The GBP/USD pair, also known as “Cable,” has experienced a significant lift, surging toward the 1.35 threshold. Several factors are at work driving this movement in the exchange rate:
#### 1. Improved Market Sentiment
– **Risk appetite** has returned to global markets, supporting risk-sensitive currencies like the British pound.
– Global equities have seen gains, reflecting investor optimism and reducing demand for safe-haven assets such as the US dollar.
– Positive Brexit developments and the avoidance of a “no deal” scenario have lessened sterling’s downside risks.
#### 2. UK Economic Data
– Recent releases of UK economic indicators have pointed to resilience in the British economy.
– Data such as GDP growth, employment figures, and retail sales have fared better than expected.
– The Bank of England’s (BoE) relatively hawkish stance compared to the US Federal Reserve has encouraged GBP buying.
#### 3. US Dollar Weakness
– The US dollar index (DXY) has declined as demand for the greenback has waned.
– Weaker US economic data and dovish Federal Reserve communications have put pressure on the dollar.
– US Treasury yields have stabilized or retreated from recent highs, reducing dollar attractiveness.
#### 4. Technical Breakout
– The GBP/USD pair broke above important resistance levels, further accelerating the bullish move.
– Technical traders have entered long positions based on chart patterns and signals, contributing to the upside momentum.
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### Technical Analysis: GBP/USD at Key Resistance
The 1.35 handle represents a psychologically significant barrier for GBP/USD traders. An analysis of the technical landscape provides further insight into the dynamics at play:
#### Support and Resistance Levels
– Immediate support is seen near the 1.3420 and 1.3380 areas, which have acted as consolidation zones during past pullbacks.
– Key resistance lies at the 1.3500 level, with further hurdles anticipated at 1.3560 and 1.3620 if the pair manages a sustained break higher.
– A failure to breach 1.35 convincingly could expose the pair to a corrective decline back toward previous support zones.
#### Chart Patterns and Indicators
– The daily chart shows a series of higher lows, indicating sustained buying interest.
– The 50-period and 200-period moving averages have begun to converge, signaling potential for a bullish crossover.
– Relative Strength Index (RSI) readings suggest the pair is not yet overbought, leaving room for further upside.
– A decisive close above 1.35 on strong volume would corroborate the bullish breakout scenario.
#### Volume Profile
– Increased turnover in the approach to the 1.35 barrier has demonstrated that participants are committed to the current move.
– If buy-side interest fades, a swift correction could ensue, especially if macro-level news disappoints.
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### Fundamental Backdrop: Diverging Central Banks
Monetary policy remains one of the most significant drivers impacting major currency pairs. In the case of GBP/USD, the divergence between the Bank of England and the US Federal Reserve is setting the stage for relative currency strength.
#### Bank of England (BoE)
– The Bo
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