GBP/USD climbs above 1.2900 but struggles to sustain bullish momentum
FUNDAMENTAL OVERVIEW:
GBP/USD remains stable above 1.2900 after dipping to 1.2870 earlier in the day. However, upside potential is limited by a risk-averse market sentiment driven by uncertainty over U.S. President Donald Trump’s trade policies.
The USD Index (DXY), which measures the Greenback against a basket of currencies, remains near its lowest level since early November after Friday’s weaker-than-expected U.S. employment data. February’s Nonfarm Payrolls (NFP) showed the economy added 151K jobs, missing estimates, while January’s figures were revised lower to 125K. Additionally, the unemployment rate unexpectedly rose to 4.1% from 4.0%.
Concerns over U.S. President Donald Trump’s economic impact further reinforce expectations that the Federal Reserve (Fed) will implement multiple rates cuts this year. Markets are currently pricing in three 25-bps cuts, keeping pressure on the dollar and supporting GBP/USD. Fed Chair Jerome Powell’s remarks that the central bank is in no rush to lower rates offered little relief for USD bulls.
Meanwhile, the British Pound (GBP) finds support from expectations that the Bank of England (BoE) will ease policy at a slower pace than the Fed. This divergence strengthens the bullish outlook for GBP/USD. With no major economic data releases from the U.K. or U.S. today, the dollar’s movements will continue to drive price action, presenting short-term trading opportunities.
GBP/USD TECHNICAL ANALYSIS DAILY CHART:
Technical Overview:
GBP/USD is trading within a up channel.
GBP/USD is moving above all the Moving Averages (SMA).
The Relative Strength Index (RSI) is in Buying Zone, while the Stochastic oscillator suggests a Neutral trend.
Immediate Resistance level: 1.2943
Immediate support level: 1.2767
HOW TO TRADE GBP/USD
On a higher time frame, GBP/USD initially experienced a sharp decline before finding support, leading to a reversal to the upside with higher highs. The pair has now broken through a key resistance level and is trading above it. However, the price is currently facing rejection at last week’s high, prompting a decline that could result in a corrective move toward the support zone. If the support level holds, GBP/USD may resume its upward trajectory.