**GBP/USD Tests 1.35 as Cable Tilts Upward**
*Adapted from FXStreet; original article by FXStreet News Team*
The GBP/USD currency pair, widely referred to as “Cable,” has recently embarked on a determined upward trajectory, consistently testing the strategic 1.35 price level. In the forex market, where economic indicators, fiscal policies, and geopolitical events intersect, each shift in the value of the pound against the dollar prompts significant attention from investors, traders, and analysts alike. Cable’s recent ascension raises several critical questions regarding the sustainability, drivers, and future direction of the pair.
### Recent Performance Overview
In the latest sessions, GBP/USD demonstrated notable resilience, with sterling advancing against the greenback amid a combination of domestic and international influences:
– The pair rose to test the psychological barrier at 1.35.
– Market participants observed increased volatility around this level, signaling its importance as both a resistance and a potential pivot area.
– The strength of the move was underscored by robust volume, suggesting that institutional flows contributed to the momentum.
– This upward tilt followed a period in which Cable had experienced consolidation within a narrower range, making the breakout more significant from a technical perspective.
### Key Drivers Behind the GBP/USD Rally
The latest upward movement in the British pound stemmed from a confluence of catalysts both homegrown and global. These include:
**Economic Indicators and Data Releases:**
– Recent UK GDP figures, which outperformed expectations, suggesting ongoing economic recovery.
– Robust labor market statistics showcasing decreasing unemployment and increasing wage growth.
– Inflation data pointing to persistent price pressures, further cementing expectations of continued Bank of England (BoE) vigilance.
**Central Bank Policy Expectations:**
– Markets priced in a hawkish stance from the BoE, anticipating either additional rate hikes or a prolonged holding period to curb inflation.
– Comparatively dovish signals from the US Federal Reserve, with Chair Jerome Powell noting that the committee is approaching the end of its tightening cycle.
– Divergence in monetary policy stances between the BoE and the Fed buoyed sterling while putting downward pressure on the greenback.
**Geopolitical and Market Sentiment Factors:**
– Relative stability in the UK’s political landscape, allowing macroeconomic themes to dominate.
– Growing risk-on sentiment as global investors recalibrated exposure to major currencies amid changing interest rate environments.
– Positioning and speculative flows, with hedge funds and larger asset managers adding to long GBP exposures.
### Technical Analysis: Breaking Down the 1.35 Barrier
Technical traders closely monitored the price action as GBP/USD approached 1.35, a level that previously acted as both resistance and support. Key technical observations included:
– **Support and Resistance:** 1.35 was identified as a critical line in the sand. If Cable could maintain closes above this level, bullish continuation scenarios would dominate. Conversely, rejection would suggest a potential pullback or consolidation.
– **Trend Indicators:** Moving averages on the daily chart (such as the 50- and 200-day) provided upward confirmation, with the shorter-term average crossing above the longer-term one—a bullish signal known as the “golden cross.”
– **Momentum Oscillators:** Relative Strength Index (RSI) readings approached, but did not breach, overbought territory—indicating strong momentum but not yet signaling a reversal.
– **Volume Analysis:** The breakout attempt was supported by higher-than-average volume, suggesting genuine interest as opposed to mere algorithmic or thin trading liquidity.
### Short-Term Market Outlook
With 1.35 tested, consensus among many analysts is that the pound’s performance will hinge on several factors in coming sessions:
– Sustained closes above 1.35 could open the door for a run towards the next resistance at 1.36, with possible targets at 1.3650 and 1.3700.
– Failure to hold the 1.35 level could trigger stop losses and encourage
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