GBP/USD has pulled back up after breaking a trend support earlier this week.
Are we looking at an opportunity to jump on a longer-term reversal?
We’re taking a closer look at the 4-hour time frame!
GBP/USD 4-hour Forex Chart by TradingView
In case you missed it, the British pound slipped after the Bank of England (BOE) held rates steady in a 6 to 3 vote, with three members backing a cut. That was seen as a dovish lean, but Governor Bailey’s steady tone helped the pound bounce off its lows.
At the same time, talk of possible U.S. involvement in the Israel-Iran conflict kept the dollar supported, even as domestic data came in mixed.
With geopolitical risks still swirling and traders pricing in a possible BOE cut in August, GBP/USD is stuck between risk-on recovery or a shift toward a deeper pullback.
Remember that directional biases and volatility conditions in market price are typically driven by fundamentals. If you haven’t yet done your homework on the British pound and the U.S. dollar, then it’s time to check out the economic calendar and stay updated on daily fundamental news!
GBP/USD broke below its ascending channel earlier this week and found a floor around 1.3380 before buyers stepped in with some real momentum.
The pair has climbed back toward the 1.3500 mark, a level that’s lining up with the 100 SMA, the 50% Fib retracement of this week’s slide, and not far from the S1 Pivot at 1.3466. It’s also creeping back into the neighborhood of that broken trend line.
If 1.3500 holds as resistance, we could see the pair turn lower again and head back to 1.3400 or even retest the 1.3380 low.
On the flip side, if the bulls manage to push GBP/USD above the 100 SMA and back over that old channel support, the pair might get back on its previous uptrend and make a run toward 1.3600 or 1.3620.
Whichever bias you end up trading, don’t forget to practice proper risk management and stay aware of top-tier catalysts that could influence overall market sentiment!
Disclaimer:
Please be aware that the technical analysis content provided herein is for informational and educational purposes only. It should not be construed as trading advice or a suggestion of any specific directional bias. Technical analysis is just one aspect of a comprehensive trading strategy. The technical setups discussed are intended to highlight potential areas of interest that other traders may be observing. Ultimately, all trading decisions, risk management strategies, and their resulting outcomes are the sole responsibility of each individual trader. Please trade responsibly.
