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The Pound Sterling rallied sharply against the US Dollar after recent economic data from the United States (US) sparked speculation that the US Federal Reserve might cut interest rates faster than expected. The GBP/USD trades at 1.2833 after hitting a daily low of 1.2707.The Greenback is being battered, given the backdrop of the July ISM Manufacturing PMI plunging to its lowest level since December 2023 and Nonfarm Payrolls missing the mark. Market participants had begun to price in a larger rate cut at the upcoming September meeting.
GBP/USD Price Analysis: Technical outlook
After diving throughout the week, the GBP/USD reclaimed key resistance levels like the 50-day moving average (DMA) at 1.2787 and the 1.2800 mark. Momentum shifted in buyers’ favor as the Relative Strength Index (RSI) turned bullishIf GBP/USD closes above 1.2800, that can pave the way for testing the June 12 high at 1.2860 and expose the 1.2900 psychological figure. Once surpassed, further upside is seen, with the next stop being 1.2950, which capped price action for four consecutive days before buyers could challenge 1.3000.Conversely, if sellers drag the GBP/USD pair below 1.2800, then the pair could stay range-bound within the 1.2800-1.2700 mark, which, if broken, will expose the 100-DMA at 1.2683.
GBP/USD Price Action – Daily Chart
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