**GBP/USD Weekly Outlook – Detailed Analysis and Projections**
*Original analysis credited to ActionForex.com*
The GBP/USD pair exhibited a decisive break higher in the previous week’s trading, as the Cable surged past significant resistance levels, bolstered by dovish undertones from the US Federal Reserve and resilient UK economic data. As traders digest these movements, this article delivers a thorough technical and fundamental analysis for GBP/USD, explores the driving forces behind recent volatility, and provides a forward-looking outlook based on current trends.
**Summary of the Week’s Price Action**
– GBP/USD started last week on a neutral note near the 1.2700 level.
– Rally gained momentum after the Fed held rates steady and hinted at potential rate cuts later this year, pushing the US Dollar broadly weaker.
– The pair broke out of previous consolidation, topping 1.2850 and closing near its weekly high.
– UK macroeconomic data, including modest inflation and robust labor market reports, underpinned Sterling.
– Risk sentiment further favored GBP as equities trended higher and geopolitical risks were contained.
**Fundamental Drivers of GBP/USD Movement**
**1. Fed Policy and USD Reaction**
The US Federal Reserve’s press conference was a significant catalyst:
– The Federal Open Market Committee (FOMC) left the main policy rate unchanged, as expected.
– Fed Chair Powell’s remarks reaffirmed that future policy adjustments would be “data dependent.”
– Projections indicated at least one rate cut in 2024, with risk skewed toward further easing should inflation continue to cool.
– US Treasury yields declined and the Dollar Index retreated from recent highs, favoring GBP strength.
**2. UK Economic Data**
UK releases provided Sterling support:
– Inflation data (CPI) remained sticky, slowing but not as much as expected, deterring expectations for imminent Bank of England (BoE) rate cuts.
– Labor market statistics showed wage growth moderating, yet still above the BoE’s comfort zone.
– PMI readings signaled steady expansion in the services sector, keeping a positive tone for the UK economy.
– Consumer confidence stabilized, indicating underlying economic resilience.
**3. Risk Sentiment and Flows**
– Positive risk appetite as US equities advanced, drawing flows out of the safe-haven dollar.
– Geopolitical tensions in Eastern Europe and the Middle East diminished somewhat, aiding riskier assets.
**Technical Analysis – GBP/USD Chart Structure**
**Weekly Chart Perspective**
The weekly chart for GBP/USD reveals a strong uptrend extension:
– The pivotal resistance at 1.2817 (previous high) was breached with conviction.
– The breakout confirmed a medium-term reversal structure from the March-April corrective lows.
**Key Technical Levels**
– *Immediate support*: 1.2770 (breakout zone), followed by 1.2700 (psychological and prior range support).
– *Near-term resistance*: 1.2892 (weekly closing high), with the next target at 1.2995 (2024 peak).
– *Longer-term objectives*: 1.3141 (weekly 200 SMA level, December 2023 high), and 1.3270.
**Trend Indicators**
– Weekly RSI: Tracking upward, not yet overbought, implying potential for further gains.
– MACD Histogram: Positive increase supports upward momentum.
– Moving Averages: 20-week and 50-week MAs have bullish cross-alignment, reinforcing the positive stance.
**Daily Chart Observation**
The daily view corroborates with a bullish bias after the recent breakout:
– Large bullish candles affirm strong buying interest, driven by both technical and fundamental factors.
– No major signs of exhaustion, but minor pullbacks are possible toward the 1.2817 area for support retests.
**GBP/USD Outlook – Short and Medium-term Scenarios**
**Bullish Scenario**
– The close above 1.2817 opens the path to 1.2892 and then psychological resistance at
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