Analysts at ExoPike take a closer look at the latest GBP/USD technical picture, as sterling climbs to its highest level in over three months while multiple momentum indicators point to a strengthening uptrend.
Pound Reaches Highest Level Since May
Sterling pushed higher against the dollar on Monday, touching its best level in over three months as markets continued paring back bets on another Fed rate increase. The advance extends a run that began in late July, with the pair now sitting near 1.3555 after working through a cluster of moving averages that had previously capped gains.
Dollar weakness has been the other side of this story, with the index measuring the currency against its major peers dipping to 99.30 at one point, a level not seen since early June, before settling near 99.45. That broad softness in the greenback has given sterling plenty of room to run.
UOB Acknowledges Earlier Neutral Call Was Premature
Strategists at UOB Group have conceded that their recent shift to a neutral stance on the pound was premature, noting that sterling rose sharply and broke above major resistance at 1.3555, with the session high reaching 1.3561. While the bank describes this breakout as not entirely decisive, they still consider it sufficient to indicate the upward bias remains intact.
UOB does caution that any further advance is likely to face firm resistance around 1.3600. Over their one to three week outlook, the bank now judges that only a breach of 1.3495, described as a strong support level, would suggest sterling isn’t ready to make a push toward 1.3600.
Technical Structure Confirms Bullish Bias
From a technical standpoint, GBP/USD maintains a clearly bullish bias, with the pair holding above its 50-day, 100-day, and 200-day Simple Moving Averages. This alignment across multiple timeframes reinforces the broader constructive picture building beneath the surface.
The Relative Strength Index on the daily chart stands at 64.9, reflecting firm bullish momentum without yet entering overbought territory. The MACD indicator remains in positive territory as well, suggesting buyers continue holding the near-term advantage.
The Average Directional Index has also climbed to 27.6, a reading that points to a strengthening trend rather than a stalling one, reinforcing the broader bullish case as long as price stays above the cluster of moving averages.
Key Resistance Levels On The Path Higher
On the upside, immediate resistance sits at the 1.3600 psychological mark, followed by 1.3700. Should the pair achieve a sustained break above 1.3700, this would open the door to a test of 1.3850, which marks the year’s high to date.
This layered resistance structure gives bulls a clear roadmap, though each level is likely to require genuine conviction to clear given how closely they’re spaced relative to current price action.
Downside Support Levels Worth Monitoring
On the downside, the 1.3500 psychological level offers the first layer of support. Below that, the next meaningful demand zone lies between 1.3417 and 1.3378, an area where several key moving averages are clustered together, adding technical significance to that particular price band.
A deeper correction beyond this zone could expose 1.3300, followed by 1.3150 should selling pressure intensify further. These levels provide traders with a clear framework for gauging how much conviction remains behind the current uptrend should momentum begin to fade.
Conclusion
GBP/USD finds itself in a technically strong position, supported by a bullish moving average alignment, firm momentum readings, and a broadly weaker US Dollar. The 1.3600 psychological level stands as the immediate hurdle for bulls, with a break higher potentially opening the path toward 1.3700 and eventually 1.3850.
With UOB Group now viewing 1.3495 as the key level that would need to break for the bullish case to weaken, traders following GBP/USD strategies should watch closely how price behaves around the 1.3600 resistance in the coming sessions, as this reaction is likely to shape the pair’s next meaningful move.
Beyond the immediate technical setup, broader macro dynamics will likely continue playing a role in shaping sentiment. Any fresh signals from the Federal Reserve regarding its rate path could quickly shift the dollar’s trajectory, either reinforcing sterling’s current momentum or introducing renewed volatility into the pair.
Similarly, upcoming UK economic data, including inflation and employment figures, will offer further clues about whether the domestic backdrop can provide additional support for the pound’s advance, or whether the rally has been driven primarily by dollar weakness rather than genuine sterling strength.