GBPUSD is consolidating inside a rectangle after a rebound

The British Pound demonstrated modest strength against the US Dollar (USD) earlier this week, extending its upward correction from 1.3180 to a high of 1.3275. This movement indicated that the currency pair had entered a rebound and recovery phase, paused the recent one-sided decline and provided bullish momentum with some relief.

However, after reaching 1.3275, a minor pullback occurred, suggesting a consolidation phase for the recent correction is underway. As of this writing, GBPUSD is trading near 1.3250. Meanwhile, the EURUSD pair eased earlier gains following the release of weak Eurozone inflation data.

The British pound showed a limited reaction to the latest UK manufacturing PMI data. The UK Manufacturing PMI registered at 52.5, below the forecasted 53.1 and in line with the previous month’s figure. Looking ahead, no major economic events are expected in the UK over the next two days, which positions US dollar movements as a key factor in determining the pound's future direction. Additionally, geopolitical developments and overall market risk sentiment are anticipated to influence pound price movements.

GBPUSD Technical Forecast

From a technical standpoint, current price action suggests that the short-term recovery trend remains intact. Observing the pair on a very short-term basis, it is clear that buyers re-entered near the previous support level of 1.3160–1.3140. The Relative Strength Index (RSI) is maintaining a position just above the midpoint, indicating cautious baseline momentum but preventing a shift into bearish territory. Therefore, despite consolidation, if bulls can sustain the price above the support level, the near-term target remains around 1.3290 (20-day simple moving average). Should bulls break through this resistance, the next target would be the 1.3330–1.3340 barrier. Conversely, a retreat back toward the key support zone would invalidate the recent upward correction and suggest the pair may continue its recent decline.



Bottom Line: The sequence of higher intraday lows indicates diminishing selling pressure, although the market remains below the 20-day SMA resistance. A decisive move above this level could trigger renewed bullish momentum and continuation toward higher targets. However, the current outlook supports only a short-term perspective, with no clear signals of sustained long-term momentum.

 

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