The GBP\/USD currency pair has seen a positive trend, with buyers attracted for the second consecutive day due to a weaker US Dollar. The pair progressed towards the 1.3500 mark, the highest point since early October, backed by a favourable technical outlook. This upward move is further supported by a break through the 100-day Simple Moving Average and strength beyond the 61.8% Fibonacci retracement level.<\/p>\n
The Moving Average Convergence Divergence hints at moderated momentum, and a consistent move above the 1.3500 mark could drive the pair towards the 1.3600 region. The 100-day SMA offers initial support, and the Relative Strength Index at 68 suggests limited gains without new catalysts. A move above the 61.8% retracement keeps buyers in control.<\/p>\n
The Pound Sterling, the UK’s currency, accounts for 12% of foreign exchange transactions globally, averaging $630 billion daily. Its value is mainly influenced by the Bank of England’s monetary policy, focusing on a 2% inflation target. Economic data like GDP, services PMIs, and trade balance impact its strength, with a strong economy boosting Sterling through potential interest rate increases.<\/p>\n
We are seeing strong upward momentum in GBP\/USD, which is building on its recent gains to test the critical 1.3500 level. This strength is primarily fueled by a weakening US Dollar, especially after we saw the latest Core PCE inflation data for November come in slightly below forecasts at 2.8%. This data reinforces the market’s expectation that the Federal Reserve will maintain a dovish stance heading into 2026.<\/p>\n
On the other side of the pair, the Bank of England’s hawkish policy provides a solid foundation for the Pound. We just saw UK retail sales figures for November show a surprise jump of 1.2% month-over-month, indicating that consumer demand remained resilient through the holiday shopping season. This robust domestic activity gives the BoE little reason to pivot away from its commitment to controlling inflation.<\/p>\n
For derivative traders, this divergence suggests considering bullish strategies in the coming weeks. Buying call options with strike prices at or above 1.3500 could capture a potential breakout, while selling out-of-the-money put options could take advantage of the firm support around the 1.3370 mark. This approach aligns with the technical picture of buying on any corrective dips.<\/p>\n
We must consider that trading volumes will be thin as we approach the end of the year. This low liquidity can amplify price movements, meaning a break above 1.3500 could be sharp and fast. While the Relative Strength Index is nearing overbought levels at 68, the underlying fundamental story appears strong enough to sustain the rally.<\/p>\n
This setup is reminiscent of the market conditions we observed in late 2023, when a similar policy divergence between the Fed and BoE drove a multi-week rally in the pair. Back then, the breakthrough of key technical levels also preceded a sustained move higher into the new year. History suggests that such fundamental drivers can create trends that persist through the first quarter.<\/p>\n
Create your live VT Markets account<\/a>\u00a0and\u00a0start trading<\/a>\u00a0now. <\/b><\/p>\n","protected":false},"excerpt":{"rendered":" GBP\/USD climbs as weaker USD boosts momentum; break above 1.3500 eyes 1.3600 amid bullish signals.<\/p>\n","protected":false},"author":62,"featured_media":17033,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[59],"tags":[],"class_list":["post-43450","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-live-updates"],"acf":{"acf_article_selection_author":null},"aioseo_notices":[],"_links":{"self":[{"href":"https:\/\/www.vtmarkets.com\/en-asia\/wp-json\/wp\/v2\/posts\/43450","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.vtmarkets.com\/en-asia\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.vtmarkets.com\/en-asia\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.vtmarkets.com\/en-asia\/wp-json\/wp\/v2\/users\/62"}],"replies":[{"embeddable":true,"href":"https:\/\/www.vtmarkets.com\/en-asia\/wp-json\/wp\/v2\/comments?post=43450"}],"version-history":[{"count":0,"href":"https:\/\/www.vtmarkets.com\/en-asia\/wp-json\/wp\/v2\/posts\/43450\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.vtmarkets.com\/en-asia\/wp-json\/wp\/v2\/media\/17033"}],"wp:attachment":[{"href":"https:\/\/www.vtmarkets.com\/en-asia\/wp-json\/wp\/v2\/media?parent=43450"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.vtmarkets.com\/en-asia\/wp-json\/wp\/v2\/categories?post=43450"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.vtmarkets.com\/en-asia\/wp-json\/wp\/v2\/tags?post=43450"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}