GBP/USD Surges Toward 1.33 After BoE’s Pill Signals Rates May Remain Higher for Longer
Technical Analysis:
GBP/USD rallied impressively during Tuesday’s session, ending the day strongly at 1.3298, up 0.92%, as bullish momentum built steadily following hawkish comments from Bank of England Chief Economist Huw Pill and weaker-than-expected U.S. CPI data. The pair traded confidently higher from its intraday low at 1.3202 during North American trade, briefly testing critical resistance at the 21-day moving average (DMA) at 1.3303/04. This technical recovery suggests improved short-term bullish sentiment, supported fundamentally by Pill’s indication that UK inflation could prove persistently high, potentially delaying further BoE cuts.
Technically, GBP/USD now faces immediate and critical resistance at Tuesday’s session high and the closely-watched 21-DMA at 1.3304. A decisive daily close above this key moving average would bolster bullish momentum and open a clear path toward the May 6 high at 1.3402. Further beyond, bulls would target the crucial 2025 peak at 1.3445 recorded on April 28, marking a major technical ceiling. Short-term momentum indicators, including the daily RSI and MACD, have turned decisively bullish, reflecting growing trader confidence in further upside potential amid the supportive fundamental backdrop.
On the downside, immediate support lies at the hourly Ichimoku cloud top at 1.3231. Below this, more substantial support emerges at the 30-DMA, currently positioned at 1.3199, closely followed by Tuesday’s intraday low at 1.3169. Although markets currently price a marginal U.S. interest rate advantage of around 20 basis points over the UK by year-end 2025—potentially limiting significant GBP/USD upside—the near-term narrative is dominated by Pill’s hawkish stance. Unless forthcoming UK CPI data on May 21 disappoints significantly, sterling bulls are likely to buy on dips, keeping the currency pair firmly supported within the broader 1.3079–1.3445 trading range.