GBP/USD price shows resilience as it tests key support at $1.34
GBP/USD tests key support at 1.3430, with upside potential toward 1.3500
The British pound continues to show resilience against the U.S. dollar, with GBP/USD recently bouncing off the key demand zone near 1.3430. This level, which previously acted as resistance in mid-May, has now turned into short-term support, aligning with the lower boundary of the current consolidation structure.
Highlights
- GBP/USD rebounds from 1.3430, with bullish momentum intact above 1.34.
- Immediate resistance sits near 1.35, with further upside targeting 1.3578.
- A close above 1.35 would strengthen the bullish outlook, while failure to break it could lead to a dip toward 1.3375.
Price action on the 4-hour chart indicates that the pair has formed a higher low while maintaining its broader bullish trend, suggesting that buyers are stepping in after a brief pullback from the recent high around 1.3600.
Key resistance at 1.3500 remains crucial for further upside
From a structural perspective, the pair remains supported by an ascending trendline that has held since early April. While a series of descending trendlines from the local top at 1.36 act as short-term resistance, the bullish momentum appears intact as long as GBP/USD holds above the 1.3430–1.3400 cluster. A break above the immediate resistance zone near 1.3500 would suggest renewed buying pressure, with the next upside target sitting near the swing high at 1.3578.
GBP/USD price dynamics (Source: TradingView)
Momentum indicators support the short-term bullish outlook. On the 30-minute chart, the RSI has moved above 62, reflecting building upside pressure without signaling overbought conditions. The MACD has crossed into bullish territory, with the histogram printing positive bars and the signal line turning upward, indicating a shift in short-term momentum after the recent correction. The daily RSI has also pulled back from the overbought zone and hovers in neutral territory, suggesting that a consolidation phase may follow.
Support and resistance levels to monitor in the near term
On the daily timeframe, GBP/USD continues to trade well above the 200-day moving average, reinforcing the strength of the broader uptrend. The most recent dip was contained by the 50-day EMA near 1.3430, which coincides with the current consolidation zone. As long as price maintains daily closes above this level, the bulls will likely attempt another retest of the 1.3600–1.3620 resistance zone.
Bollinger Bands on the 4-hour chart show price rebounding from the lower band and pushing toward the midline, suggesting that the corrective phase may be ending. A sustained move above 1.3485 would likely see the upper band near 1.36 tested again. However, failure to break and hold above 1.35 could trigger another dip toward the 1.3400–1.3375 area.
The outlook for GBP/USD remains cautiously bullish as long as the pair holds above 1.34. A confirmed breakout above the descending resistance and a close above 1.35 would validate a push toward 1.3575 and possibly 1.3600. On the downside, a break below 1.3375 would neutralize the short-term bullish bias and expose the pair to a deeper retracement toward 1.33.
As previously discussed, GBP/USD remains in a consolidation phase above the 1.34 support zone.A decisive breakout above 1.35 would indicate a continuation of the bullish trend, with further targets at 1.3578 and 1.3600. Failure to break this resistance could lead to a pullback toward lower support levels around 1.3375 and 1.3300.
