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The GBP/USD currency pair extended its near-term recovery rally to wrap up the trading week, as it was seen inching into a familiar congestion zone and clawing back meager gains from the midweek’s backslide into the 1.3000 handle. The pound sterling was bolstered by better-than-expected UK Retail Sales figures, with gains further buoyed by a broad-market easing in greenback bidding.UK Retail Sales bounced 0.3% in September, falling back from August’s 1.0% but still sticking well above the expected -0.3% contraction. After a raft of bad data from the UK, pound bidders got the break they needed. Cable bulls will now have to settle in for the long wait to next week’s UK Purchasing Managers Index (PMI) figures, which are due next Thursday.US housing and construction figures came in moderately mixed on Friday, further entrenching investors in a buying mood and crushing any fears of an economic slowdown right around the corner. The US’ “soft landing” scenario appears to have been fully averted, with growth and activity metrics easily beating expectations, and upbeat Retail Sales figures released earlier this week further make the case.
GBP/USD Price Forecast
The GBP/USD currency cross showed some resilience near the 1.3000 level after bouncing from recent lows, but the recovery remained constrained by the 50-day Exponential Moving Average (EMA) at 1.3094, which may now act as a key point of resistance.The pair was recently seen trading at 1.3052, and a successful break above the 50-day EMA would signal a stronger bullish reversal. However, the broader outlook will likely remain neutral-to-bearish as long as the pair trades below the 1.3100 resistance zone. A failure to clear this level could bring the bears back into play, with the 200-day EMA at 1.2844 acting as a critical support level.The Moving Average Convergence Divergence (MACD) indicator remained in bearish territory, with the signal line below the MACD line indicating that downside pressure has persisted.However, the histogram has been showing signs of narrowing, which may suggest a potential shift in momentum in the near-term. A sustained move above the 50-day EMA could pave the way for a test of the 1.3150 and 1.3200 levels, but failure to break higher could lead to renewed selling, targeting the 1.2900 support zone. Traders should watch for a clear directional break to confirm the next move.
GBP/USD Daily Chart
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