GBP/USD price rallies toward $1.36 resistance amid bullish breakout but caution signs emerge
GBP/USD hits key resistance at 1.3600 as short-term momentum signals caution
The GBP/USD pair continues to show bullish momentum, testing the key 1.3600 level after breaking out above the $1.3450 zone. The pound’s impressive rally, which began earlier in the week, is largely driven by a shift in market sentiment, with technical breakouts reinforcing the upward trajectory. However, as the pair nears resistance levels, early signs of exhaustion have emerged, prompting traders to remain cautious heading into May 27.
Highlights
- GBP/USD price is trading near $1.3560 after a strong breakout above $1.3450.
- Key resistance lies at $1.36, with further upside potential toward $1.3650–$1.3680.
- Short-term indicators suggest signs of weakening bullish momentum, with RSI divergence and a weakening MACD.
On the 4-hour chart, GBP/USD price action is well-supported by the 20/50 EMA cluster, maintaining a series of higher highs and higher lows. This structure indicates strong bullish sentiment, with the pair steadily climbing toward the 1.3600 psychological resistance. A break above 1.36 could expose the 1.3650–1.3680 zone, which aligns with previous resistance areas from 2022 and upper Fibonacci levels.
GBP/USD price forecast (Source: TradingView)
However, short-term momentum indicators show signs of weakening. The 30-minute RSI has fallen below 55, signaling diminishing bullish strength, while the MACD histogram shows a slight bearish crossover. These indicators suggest that while the longer-term bullish trend remains intact, a short-term pause or consolidation may be on the horizon.
Outlook for May 27: Focus on the $1.36 resistance level
For May 27, the focus remains on whether GBP/USD price can break through the 1.36 resistance level with volume. A clean breakout would open the door for a move toward the 1.3650–1.3680 region.
GBP/USD price forecast (Source: TradingView)
On the downside, immediate support is found at 1.3480, which aligns with the 20 and 50 EMAs. A daily close below 1.3410 would shift the bias toward a deeper pullback, with 1.3350 emerging as the next key support.
As mentioned previously, the GBP/USD price outlook remains bullish, but short-term technical indicators point to the possibility of minor pullbacks. The success of the 1.36 breakout will determine the pair's next move, but traders should be vigilant for any potential false breakouts or intraday volatility near resistance levels.
