The GBP/USD currency pair recently surged to a new high for 2025, reaching levels not seen since late 2024. However, this upward momentum encountered resistance, leading to a pullback. Despite this, the pair remains on the bullish side, supported by several key factors.
On the 4-hour chart, the Relative Strength Index (RSI) indicator rose above 80, signaling extremely overbought conditions for GBP/USD in the near term. The pair surpassed multiple resistance levels, including the 50% Fibonacci retracement at $1.3094 and the 61.8% level at $1.3148. Currently, GBP/USD is trading near the 1.3100 mark, consolidating its gains. Immediate resistance is identified at $1.3226, with further targets at $1.3264 and $1.3300. On the downside, support levels are seen at $1.3041 and $1.2974.
The recent strength of the British Pound can be attributed to a combination of factors, including positive UK economic data and investor sentiment. However, the market is also influenced by external elements such as trade policies and geopolitical developments. The U.S. dollar's performance is being weighed down by tariff concerns and expectations of potential Federal Reserve rate cuts, further impacting the GBP/USD pair.
While the recent rejection from new highs suggests a period of consolidation, the overall bullish trend for GBP/USD remains intact. Traders and investors should monitor upcoming economic data releases and central bank communications, as these will provide further insights into the pair's direction in the coming weeks.