FX.co ★ UFCworriers | GBP/USD

GBP/USD Forecast: Pound Holds Firm Near Multi-Month High as Bulls Challenge 1.3600 Barrier Sterling Maintains Recovery Momentum Technical analysis of GBP/USD shows the pair maintaining a constructive bullish structure despite early-week volatility linked to geopolitical tensions and stronger US Dollar demand. The pair recovered a major portion of its bearish opening gap and climbed back toward the 1.3600 handle during Monday trading. Buyers continue to defend dips aggressively, which reflects underlying confidence in the British Pound. Still, the market remains trapped below the key 1.3635 resistance zone that capped recent upside attempts earlier this month. That area now stands as the most important short-term barrier for trend continuation. The overall structure on the daily chart remains tilted to the upside. GBP/USD continues to print higher lows while holding comfortably above medium-term moving averages. Recent candles also show that selling pressure fades quickly whenever the price revisits support zones near 1.3550. The broader recovery from March lows remains technically healthy, and momentum indicators still support the possibility of another bullish extension if buyers regain control above current levels. Trend Structure Signals Ongoing Bullish Bias The latest price action reflects a market that is gradually building strength rather than producing an explosive breakout. GBP/USD spent several weeks forming a stable base around the 1.3200 and 1.3300 regions before starting its current leg higher. That accumulation phase created a stronger long-term foundation and shifted sentiment firmly in favor of the bulls. Since then, the price has respected rising dynamic support levels with each pullback attracting renewed buying interest. The moving average structure on the chart reinforces that positive tone. Price continues trading above the major trend averages while the shorter-term moving averages are turning upward again. The Ichimoku cloud structure also supports the bullish scenario as candles remain above the cloud base, and future cloud projection still points higher. That combination normally reflects stable trend continuation conditions rather than immediate reversal risk. Momentum studies present a balanced but still positive picture. The RSI remains above the neutral 50 line and continues drifting higher without entering extreme overbought territory. That suggests there is still room for additional upside before exhaustion becomes a larger concern. MACD positioning also remains supportive as histogram bars continue holding in positive territory even though upside acceleration has slowed slightly in recent sessions. The stochastic indicator shows mild cooling after recent gains, but no confirmed bearish crossover has appeared yet. Resistance Levels Become Critical for Next Breakout The 1.3600 to 1.3635 region remains the key battlefield for GBP/USD traders. Price has tested this zone multiple times, and each rejection produced temporary consolidation rather than aggressive downside reversal. That behavior often suggests underlying buying pressure remains intact beneath the surface. A confirmed daily close above 1.3635 would likely trigger fresh momentum buying and open the path toward higher resistance targets near 1.3700 and possibly 1.3750 in the coming sessions. On the downside, the first major support rests around the 1.3550 region, which already attracted buyers during the latest intraday decline. Beneath that level, the next important technical support appears near 1.3520, where the rising short-term moving average intersects with the prior breakout structure. If bearish pressure deepens further, then 1.3475 and 1.3400 become broader structural protection zones for the bullish trend. From a price action perspective, the market still favors continuation over reversal. Recent candles continue showing long lower wicks and controlled pullbacks, which often signal that sellers are struggling to establish stronger downside conviction. Unless GBP/USD falls back below the 1.3475 structure, the broader bullish framework remains valid. Fundamentals Keep Both Currencies Supported The fundamental backdrop remains unusually balanced, which explains the choppy but upward-moving price action. On one side, the US Dollar continues receiving support from geopolitical uncertainty and expectations that the Federal Reserve may maintain higher interest rates for longer. Renewed tensions involving Iran and the Strait of Hormuz lifted oil prices again, which revived inflation concerns across global markets. Higher oil prices create additional pressure on central banks because inflation may remain sticky for longer than previously expected. Stronger US labor market conditions also continue supporting the Dollar. Markets still believe the Fed could maintain a hawkish tone if inflation data remains elevated during the second half of the year. According to market pricing, traders still see a possibility of another Fed rate increase, which keeps US yields elevated and limits aggressive Dollar selling. However, the British Pound also enjoys solid domestic support. Political stability in the United Kingdom improved after Prime Minister Keir Starmer rejected speculation about resignation following local election losses. That helped calm investor concerns around UK political uncertainty. At the same time, the Bank of England continues signaling that inflation risks remain tilted to the upside. Comments from MPC member Megan Greene reinforced expectations that policymakers may keep a restrictive stance if inflation pressures persist. That shift has strengthened confidence in Sterling and prevented deeper GBP/USD corrections. Bullish and Bearish Scenarios Ahead The bullish scenario depends heavily on a confirmed breakout above 1.3635. If buyers manage to clear that ceiling with strong volume, then GBP/USD could quickly accelerate toward 1.3700 and higher. Stable UK inflation alongside softer US inflation numbers would likely strengthen that move. A weaker Dollar environment could create ideal conditions for trend continuation. The bearish scenario remains possible if geopolitical risks intensify further and push investors back toward safe-haven Dollar demand. Stronger-than-expected US CPI data later this week could also reinforce expectations for tighter Fed policy and pressure GBP/USD lower. In that case, a sustained break below 1.3550 may trigger a deeper retracement toward 1.3475 and possibly the 1.3400 area. Risk factors remain elevated because markets are now highly sensitive to inflation data, central bank commentary, and geopolitical headlines. Traders should also monitor the upcoming Trump-Xi summit, as any unexpected developments could quickly reshape broader risk sentiment across currency markets. Final Outlook for GBP/USD GBP/USD continues trading within a strong medium-term bullish structure despite temporary resistance near the 1.3600 region. The pair remains supported by stable UK fundamentals, improving political confidence, and expectations that the Bank of England may keep rates elevated if inflation persists. Technical indicators still favor buyers while price action continues showing resilience above key support levels. The next decisive move now depends on whether bulls can finally overcome the 1.3635 barrier. A successful breakout would likely confirm continuation toward fresh multi-month highs. Until then, short-term consolidation and volatile swings may continue as traders wait for major US inflation data and further geopolitical developments. For now, the broader trend still leans bullish, but the market remains highly reactive to incoming macroeconomic signals.