Cable looks like it’s gearing up to bust out of a weeks-long downtrend!
Will key resistance levels keep the bulls in check over the next few days?
Or is GBP/USD about to kick off a longer-term comeback?
GBP/USD 4-hour Forex Chart by TradingView
The British pound dominated the FX scene last week thanks to the Bank of England’s (BOE) “hawkish cut” surprise and the U.K.’s relative insulation from the U.S.-EU tariff drama.
Over in the U.S., soft mid-tier data and Fed rate cut expectations kept the dollar under pressure, wiping out some of the boost from the latest trade deals.
Remember that directional biases and volatility conditions in market price are typically driven by fundamentals. If you haven’t yet done your fundie 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 has been making lower highs and lower lows since late June, but it recently bounced from the 1.3150 lows to trade closer to 1.3450.
More importantly, the pair is now holding above the 100 SMA and has broken past the descending channel resistance on the 4-hour chart.
The 1.3450–1.3500 area is the key zone to watch, as it lines up with the 78.6% Fib of late July’s downswing, the R1 Pivot Point at 1.3520, and the 4-hour chart’s 200 SMA.
A rejection from the resistance zone would keep the downtrend prospects alive and could send the pair back toward 1.3400, 1.3300, or even the 1.3150 August lows.
On the flip side, a clean break above this zone could open the door for a move toward 1.3600, 1.3650, or 1.3750.
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.
