Trendline Support Could Spark a New Bullish Surge in GBPUSD

Manuel

Summary:

This area has previously acted as a support level, serving as a springboard for upward momentum.

BUY GBPUSD

Close Time

CLOSED

1.35200

Entry Price

1.37500

1.34500

1.33223 -0.00157 -0.12%

70.0

Pips

Loss

1.34500

1.34499

Exit Price

1.35200

Entry Price

1.37500

Federal Reserve Chairman Jerome Powell recently commented on the current state of the U.S. job market, indicating that any uptick in layoffs could quickly push the unemployment rate higher, suggesting a more fragile labor market than some had anticipated. This underlines the Fed’s cautious stance as they continue to assess inflation and employment data, holding off on any major policy decisions for the time being.

Meanwhile, St. Louis Fed President Alberto Musalem expressed more optimism about the U.S. economy, noting that the labor market is near full employment. However, he also warned that inflation risks are tilted to the upside, particularly due to the lingering effects of tariffs, which have yet to fully materialize. A weaker U.S. dollar could contribute to these inflationary pressures in the months ahead.

Looking ahead, the economic agenda will feature remarks from key Fed officials, including Governor Christopher Waller and San Francisco Fed President Mary Daly. In the UK, market participants will be closely monitoring GDP and industrial production data, as well as manufacturing figures, which could impact market sentiment.

On the trade front, with reciprocal tariffs delayed until August 1, investors are betting that the Trump administration may delay or further suspend both the tariff packages announced earlier in April and new tariffs targeting specific countries and sectors. Markets remain hopeful that many of Trump’s tariff threats will not come to fruition, and traders’ confidence is growing as inflationary pressures from these tariffs have been relatively muted.

UK GDP data for May is expected to show a weak recovery, with limited impact on market sentiment, as the numbers are forecast to remain below expectations. The Office for Budget Responsibility (OBR) has raised concerns about the long-term sustainability of UK public finances, citing rising state pension costs and growing climate-related demands.

The Bank of England (BoE) recently highlighted the challenges facing global financial stability, noting geopolitical tensions, fragmented trade flows, and rising sovereign debt pressures. While UK banks remain well-capitalized, the BoE warned that global financial conditions are becoming more challenging, with asset valuations remaining elevated and susceptible to sharp corrections. Trendline Support Could Spark a New Bullish Surge in GBPUSD_1

Trendline Support Could Spark a New Bullish Surge in GBPUSD_1

Technical Analysis

GBP/USD recently underwent a bearish pullback after a strong bullish move that peaked at 1.3790 on July 1. Since then, the price has retraced to a local low of 1.3527, near the 200-period moving average on the 4-hour chart. This area has previously acted as a support level, serving as a springboard for upward momentum. If this pattern repeats itself, we could see a new bullish move unfold. Should the price reject this zone, another leg higher could follow, targeting previous highs.

Additionally, the 100-period and 200-period moving averages have closely followed the upward trendline, making this area a key support region. As the price approaches these levels once again, it may attract buyers looking for a potential reversal. The RSI has recently dipped to 38, nearing oversold territory, suggesting that downward pressure may be waning. While a further pullback to the trendline is possible, this could lead to a bullish rejection, making long positions favorable from this zone.

Trading Recommendations

Trading direction: Buy

Entry price: 1.3520

Target price: 1.3750

Stop loss: 1.3450

Validity: Jul 22, 2025 15:00:00

Risk Warnings and Disclaimers

You understand and acknowledge that there is a high degree of risk involved in trading. Following any strategies or investment methods may lead to potential losses. The content on the site is provided by our contributors and analysts for information purposes only. You are solely responsible for determining whether any trading assets, securities, strategy, or any other product is suitable for investing based on your own investment objectives and financial situation.

Risk Disclosure

The risk of loss in trading financial instruments such as stocks, FX, commodities, futures, bonds, ETFs and crypto can be substantial. You may sustain a total loss of the funds that you deposit with your broker. Therefore, you should carefully consider whether such trading is suitable for you in light of your circumstances and financial resources.

No decision to invest should be made without thoroughly conducting due diligence by yourself or consulting with your financial advisors. Our web content might not suit you since we don't know your financial conditions and investment needs. Our financial information might have latency or contain inaccuracy, so you should be fully responsible for any of your trading and investment decisions. The company will not be responsible for your capital loss.

Without getting permission from the website, you are not allowed to copy the website's graphics, texts, or trademarks. Intellectual property rights in the content or data incorporated into this website belong to its providers and exchange merchants.

Recent Searches

Top Searches

Markets

Analysis

User

24/7

Economic Calendar

Education

Data

Trendline Support Could Spark a New Bullish Surge in GBPUSD

Technical Analysis

Risk Disclosure