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GBP/USD starts the week on a softer note, trading around 1.3700 after last week's strong 2% rally fueled by US Dollar weakness and improved risk sentiment.
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Technical indicators point to a loss of bullish momentum, with critical support at 1.3650 under scrutiny for potential downside risk.
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Markets now turn to key US economic data and central bank commentary, including the upcoming Nonfarm Payrolls (NFP) report, for fresh directional cues.
GBP/USD Forecast: Sterling Faces Pressure as Support at 1.3650 Comes into Focus
The Pound Sterling (GBP) is correcting lower against the US Dollar (USD) on Monday, trading around 1.3700 after posting a solid 2% gain last week. The short-term technical outlook signals fading bullish momentum, with the key 1.3650 support level in focus. A decisive break below this zone could trigger a deeper pullback.
Last week’s surge in GBP/USD was driven by a combination of easing geopolitical tensions and growing market skepticism over the Federal Reserve’s independence, both of which weighed heavily on the US Dollar and boosted risk sentiment in favor of the Pound.
GBP/USD Price Forecast: Bulls Target 1.3750 Amid Uptrend Channel
The GBP/USD pair has bounced back from recent losses and is trading near 1.3730 in early Monday trading, maintaining its bullish trajectory. Technical indicators on the daily chart suggest continued upward movement within an ascending channel pattern.
The 14-day Relative Strength Index (RSI) remains just below the 70 mark, reinforcing a bullish bias. However, a break above 70 could signal overbought conditions and raise the risk of a short-term correction. Additionally, GBP/USD is trading above the nine-day Exponential Moving Average (EMA), supporting stronger near-term momentum.
GBP/USD Weekly Outlook: Sterling Eyes Central Bank Cues in NFP Week
The British Pound continued its upward climb against the US Dollar last week, pushing GBP/USD above 1.3750 to its highest level since October 2021. The rally was fueled by a weakening USD, as investor confidence in the Fed's policy direction wavered and risk appetite improved.
With the US Nonfarm Payrolls (NFP) report due later in the week and key central bank commentary expected, traders will be closely watching for cues that could determine whether Sterling extends its gains or faces renewed downside pressure.
