FX.co ★ Quee | GBP/USD

TECHNICAL ANALYSIS OF GBP USD PAIR. The GBP/USD pair on the H4 timeframe is currently trading around the 1.3507 level, showing a notable recovery after a prolonged bearish phase that dominated price action from mid-February to late March. From a broader perspective, the market structure initially formed a strong bullish impulse, peaking near the 1.3815 resistance zone, before transitioning into a clear downtrend characterized by lower highs and lower lows. However, recent price behavior suggests a potential shift in momentum as buyers stepped in aggressively from the 1.3170–1.3200 demand zone, which aligns with a key psychological level and historical support area. This rebound is further supported by increasing bullish volume, indicating institutional accumulation at lower levels. Technically, price has now reclaimed the 50-period moving average (red) and is attempting to break above the 100-period (green) and 200-period (blue) moving averages clustered around 1.3480–1.3520, forming a critical confluence resistance zone. A sustained breakout above this region could confirm a short-term trend reversal, especially if supported by strong candle closes. Fundamentally, GBP strength is being supported by expectations of tighter monetary policy from the Bank of England, while USD weakness is driven by easing inflation concerns and a more cautious Federal Reserve outlook. This divergence is contributing to bullish pressure in GBP/USD, making the current zone a pivotal decision point for market participants.

From a trading strategy perspective, the key resistance to watch is at 1.3540, followed by a stronger barrier near 1.3600, where previous rejection and supply were evident. On the downside, immediate support lies at 1.3450, with a more critical level at 1.3350, which aligns with the 100-period moving average and prior consolidation base. If price successfully breaks and holds above 1.3540, a bullish continuation toward 1.3650 and potentially 1.3720 becomes highly probable, offering a favorable long setup. In this scenario, traders may consider entering buy positions around 1.3520–1.3540 after a confirmed breakout and retest, with a stop-loss placed below 1.3450 and take-profit targets at 1.3650 and 1.3720. Conversely, if the price fails to break this resistance and forms bearish rejection patterns such as pin bars or engulfing candles, a short-term reversal could occur, targeting 1.3400 and 1.3350 levels. In such a case, sell entries around 1.3520–1.3540 with a stop-loss above 1.3600 and take-profit near 1.3400 would be justified. Traders should also be cautious of false breakouts around this high-liquidity zone, as institutions often manipulate price before establishing direction. Overall, the market bias is shifting from bearish to neutral-bullish, and confirmation above key moving averages will be crucial in determining the next sustained trend direction.