GBP/USD from ThinkMarkets — TradingView

• UK Monetary Policy Stable: Sterling continues to benefit from expectations that the Bank of England will continue its current policy; this supports the pound’s relative strength against other major currencies.
• US Dollar Pressure Decline: The US dollar is stabilizing and trending slightly lower after last week’s events. This gives GBP an opportunity to regain some gains and break above nearby resistance.

Technical vision and expected scenarios:

According to the chart, the pair is currently trading above 1.35887 after a breakout, indicating relatively strong demand on the demand side. This comes after trading sideways below that level, which could be a corrective period for the move higher and trading above 1.34826.

So far, several technical indicators support this buying momentum; following a positive crossover between the moving averages (20 and 50), the price has clearly stabilized above the moving averages, which is a positive sign supporting upward momentum.

In addition to the relative strength index (RSI) curve stabilizing above the 50 level; this confirms the same positive view and reaches the overbought zone, which indicates that there is strong buying momentum and we may see some correction to retest lower levels.

Based on this, here are the possible scenarios:

1. Positive Scenario:
Stability and stability above the 1.35887 level could push the pair to directly test and target the 1.36941 level. A breakout and close above it could open the door to higher levels near 1.38681.

2. Scenario:
A break below and another hold below 1.35887 could point to more sideways action below this level.

3. Negative Scenario:
Another break below 1.35887, followed by a breakout and hold below 1.34826, could expose the pair to fresh selling pressure with target levels at 1.33902 and perhaps 1.33456.
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