**GBP/USD Price Forecast: Softens Below 1.3500 but Retains Positive Technical Outlook**
*Adapted from original analysis by Haresh Menghani, FXStreet*
The GBP/USD currency pair, often referred to as “Cable,” continues to be at the crossroads of various economic and technical influences. While recent sessions have seen the pair softening below the symbolic 1.3500 threshold, underlying technical indicators hint at a resilient positive bias that could shape the near-term trajectory. This article surveys the prevailing sentiment, identifies key technical and fundamental drivers, and outlines scenarios that traders should consider as they navigate the GBP/USD market environment.
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## Market Overview
The British pound recently lost momentum against the US dollar, pulling away from highs near 1.3530 and faltering below the psychologically significant 1.3500 zone. Despite the apparent near-term weakness, several signals within the market paint a broader picture of underlying resilience for the GBP, suggesting that the selling pressure may subside and give way to fresh upward attempts.
### Current Conditions
– GBP/USD trades with a softer tone below 1.3500, having faced resistance at 1.3530 in the previous session.
– The US dollar’s rebound from multi-week lows is a significant force, as investors digest recent US economic data and reassess Federal Reserve policy expectations.
– Key support for GBP/USD emerges near the 1.3450 area, while immediate resistance remains at the 1.3530 hurdle.
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## Fundamental Drivers
A combination of both British and American economic factors continues to shape the direction of GBP/USD, with both currency-specific developments and broader risk dynamics in play.
### US Dollar Dynamics
– **Dovish Federal Reserve Speculation:**
The greenback came under pressure amid speculation that the Federal Reserve might delay further rate hikes or even consider rate cuts in the coming quarters based on signs of moderating inflation.
– **Market Sentiment:**
A mildly risk-on mood in global equities limited further USD appreciation, even as US Treasury yields attempted to recover.
– **Economic Data:**
Recent US macroeconomic prints, including jobs and inflation data, injected uncertainty about the pace and timing of interest rate moves.
### British Pound Fundamentals
– **Bank of England Policy:**
The Bank of England’s persistent rate-tightening bias—albeit at a more cautious pace—has been providing tailwinds for the pound. Policymakers continue to voice concerns over sticky inflation, keeping expectations for rate support alive.
– **UK Economic Outlook:**
Growth indicators from the United Kingdom have lately shown some resilience, underpinning the GBP despite global headwinds.
– **Political Developments:**
Domestic politics and ongoing negotiations with the European Union occasionally trigger volatility, influencing sentiment and capital flows.
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## Technical Analysis
The technical picture for GBP/USD remains favorable, with charts indicating the possibility of fresh gains despite the current pullback. Key technical tools such as moving averages, trendlines, and oscillator signals are central to this assessment.
### Daily Chart Analysis
– **Short-Term Weakness:**
After failing to maintain upward momentum around 1.3530, GBP/USD retreated below 1.3500, but found support above 1.3450.
– **Moving Averages:**
The pair retains a position above its 50-day Simple Moving Average (SMA), which is frequently interpreted as an indicator of sustained medium-term bullishness.
– **Trendline Support:**
An upward sloping support trendline, extending from the early November lows, converges near the current price region and cushions the downside.
– **RSI Indicator:**
On the daily timeframe, the Relative Strength Index (RSI) remains comfortably above the neutral 50 mark, pointing to sustained positive momentum and signaling that the latest dip could be a corrective phase rather than a trend reversal.
### Key Technical Levels
– **Support:**
– Immediate:
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