**GBP/USD Price Forecast: Holds Medium-Term Bullish Bias Above 1.3600**
*Based on analysis by Ross J Burland, original article at FXStreet (https://www.fxstreet.com/news/gbp-usd-price-forecast-holds-medium-term-bullish-bias-above-13600-202602090516)*
The British Pound (GBP) paired with the United States Dollar (USD), often referred to as ‘Cable’, has exhibited resilience and retained a medium-term bullish bias while holding firm above the psychologically important 1.3600 level. In this comprehensive analysis inspired by Ross J Burland’s market outlook, we delve into the underlying factors behind the current trend, key technical levels in play, the macroeconomic context, and what traders should watch for as the pair moves forward on the global FX stage.
### Market Context: External and Domestic Drivers
#### External Factors Supporting the Pound
– **US Dollar Dynamics**:
The US Dollar has seen fluctuating performance, largely guided by anticipation surrounding the Federal Reserve’s monetary policy decisions, mixed economic reports, and shifting risk sentiments in global markets. Dollar softness acts as a tailwind for GBP/USD but volatility remains heightened because of ongoing debates about US inflation persistence and the timing/extent of future Fed rate cuts.
– **Global Economic Uncertainty**:
Periods of risk-on sentiment in capital markets have benefited higher-yield currencies like the Pound, with investors seeking alternatives to the Dollar amid concerns about US fiscal policy, election-related uncertainties, and inconsistent economic data.
#### Domestic UK Influences
– **Bank of England (BoE) Policy Stance**:
The Bank of England’s tone and actions continue to be closely monitored. While the UK’s economic recovery has been uneven, sticky inflation and cautious rhetoric from policymakers have limited dovish expectations, making GBP attractive compared to peers where rates are set to fall more aggressively.
– **Economic Data and Political Backdrop**:
Market participants are attentive to UK growth figures, labour market data, headline and core inflation readings, and Brexit-related headlines. The ability of the UK economy to show resilience, combined with political stability, tends to support the GBP’s position above its medium-term supports.
### Technical Analysis: Cable’s Bullish Continuity
The GBP/USD pair has shown persistence by preserving its position above the 1.3600 support level. This threshold is not merely psychological but is reinforced by technical indicators and prior price action.
#### Key Technical Observations
– **Support and Resistance Levels**:
– Immediate support is found at 1.3600
– Secondary support exists near 1.3520
– Resistance to the upside comes in at 1.3700, with further barriers at 1.3750 and 1.3800
– **Chart Formations**:
GBP/USD is forming higher lows, a classic bullish characteristic suggesting accumulation on dips. The pair’s inability to close below 1.3600 signals persistent demand.
– **Moving Averages**:
The 50-day simple moving average (SMA) is trending above the 200-day SMA, creating a so-called ‘golden cross’, which often underpins continued bullish sentiment in the medium term.
– **Momentum Indicators**:
– Relative Strength Index (RSI) readings predominantly hover in neutral-to-bullish territory, nowhere near oversold levels, indicating room for further price appreciation.
– Moving Average Convergence Divergence (MACD) remains in positive territory, supporting ongoing upside momentum.
#### Scenario Analyses
– If GBP/USD sustains closes above 1.3600, bulls are likely to target 1.3700 and then 1.3800. Breaking these levels could open the door to a retest of multi-month highs.
– A clear plunge below 1.3600 could prompt a test of secondary support at 1
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