The GBP/USD pair continued its strong upward momentum for the second consecutive day on Thursday, advancing to its highest level since October 2024 during the Asian session. The pair currently trades just above the mid-1.3000s, reflecting a 0.40% gain for the day, and appears poised for further gains as the U.S. Dollar (USD) remains under pressure.
USD Weakness Amid Trade Tariff Concerns
The U.S. Dollar Index (DXY), which measures the Greenback against a basket of currencies, hit a fresh year-to-date low in response to U.S. President Donald Trump’s announcement of trade tariffs. This move has fueled expectations that the Federal Reserve (Fed) will resume its rate-cutting cycle sooner than expected, contributing to a sharp decline in U.S. Treasury bond yields. The subsequent USD weakness, coupled with a global risk-off sentiment, has weighed heavily on the currency.
GBP Supported by BoE’s Slow Rate Cuts
Meanwhile, the British Pound (GBP) finds support in expectations that the Bank of England (BoE) will be more gradual in lowering borrowing costs compared to other central banks, including the Fed. This has further bolstered the GBP/USD pair, helping to sustain its ongoing uptrend since the January monthly swing low.
Technical Outlook for GBP/USD
From a technical standpoint, GBP/USD has broken through the psychological 1.3000 level, confirming a breakout from a multi-week trading range. Oscillators on the daily chart remain firmly in positive territory, indicating a constructive near-term outlook for the pair, without yet reaching overbought conditions.
The next key targets for the pair are the 1.3100 round figure and the 1.3125 resistance region. Should the momentum continue, the pair could rise towards the 1.3155 intermediate barrier, and further towards the 1.3180 and 1.3200 marks.
Downside Risks and Support Levels
On the downside, the 1.3000 level now serves as immediate support, with any corrective moves likely to be seen as buying opportunities near the 1.2955 region. The next critical support levels are at 1.2900 and the 1.2875-1.2870 horizontal zone. A decisive break below this range could shift the near-term bias towards bearish traders, potentially pushing GBP/USD towards the 200-day Simple Moving Average (SMA) around the 1.2800 mark.
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