GBPUSD Daily Outlook GBP/USD has surpassed the key psychological level of 1.3400 in today’s trading. This was a significant technical breakout coinciding with the 78.6% Fibonacci correction of the major down wave from the high of 1.4250 to the low of 1.0325. The upside has propelled the corresponding pair to a three-year high of 1.3443, a significant milestone that signals growing bullish momentum and greater investor confidence in the British Pound. Supported by sustained buyout interest, the uptrend emerged after the pair gained a solid footing at the 1.2715 support zone. This level marked the bottom of the last calibrated fullback and has acted as a launch pad for an aggressive uptrend recovery since then. These uptrend momentums are further supported by bullish signals emerging from key technical indicators. The Moving Average Convergence and Divergence (MACD) is still firmly positioned above its trigger line and zero axis, indicating positive market sentiment and a strengthening trend. At the same time, the Stochastic Oscillator is fast approaching its buyout overshoot limit of 80. If the current uptrend continues, additional price gains are expected. A continued upswing could lead the pair to reach the notable high of 1.3635, recorded in February 2022. A breakthrough of this level would not only confirm the sustained upward momentum but could also open the door to testing the 1.3750 resistance area, last reached in January 2022. This area could act as an important psychological and technical barrier that could trigger profit realization. However, a significant break above this level would accelerate the bullish mood, which would likely lead to a more aggressive advance towards pre-2022 levels. On the other hand, a drop at the current high must be seen in the context of a continued uptrend, unless key support levels are broken. The first line of defense for the bulls is near the 1.3208 level. This level acted as a slight resistance in previous sessions, but can now turn into a short-term support. Below this level is the round figure of the psychologically significant level of 1.3100, which is closely related to the recent price congestion area and can act as an important stability point. A stronger correction could bring the 50-day SMA near the 1.2980 level into play. This SMA has been used as a trend validation tool in the past and could provide robust support during testing. Below that, stronger structural support is provided by the medium-term uptrend line, which has held intact since the end of 2023, and the 200-day SMA near the 1.2840 area. These levels represent important thresholds for the overall strength outlook. A drop below one of the two levels could undermine the medium-term uptrend and lead to a further significant shift in sentiment, rebalancing in favor of sellers. Despite these downside risks, the overall trend will remain up, especially as long as the pair maintains its daily closing price above 1.3400. If the price sustains above the 78.6% Fibonacci crystal line, a breakout would be confirmed with more weight placed on the bullish scenario, and the recovery tax at the multi-year low of 1.0325 remains intact, which could put it in the final stages of a full recovery. From a broader perspective, the strength of the GBP/USD currency is supported by technical momentum as well as improved macroeconomic sentiment in the UK. Expectations of further stabilization of the Bank of England’s monetary policy and signs of resilience in the UK economic data contributed to the recovery of poundage. Meanwhile, if the US Federal Reserve (Fed) adopts more of a dovetailing policy or the US economy shows signs of slowing, it could increase the downward pressure on the dollar, reinforcing the bullish trend of the currency pair. Finally, GBP/USD has firmly broken through a key technical level, confirming the strong uptrend that has been forming over the past few weeks. As long as the price is stable above 1.3400 and looking for support at higher levels, the possibility of a move towards the resistance zones of 1.3635 and 1.3750 is still open. However, traders should be especially cautious of the possibility of a short-term correction.
