GBP/USD Rangebound Amid Tariff Uncertainty; Bullish Prospects Remain Above 1.2850
Technical Analysis:
GBP/USD edged lower on Tuesday, remaining firmly within its recent consolidation range of 1.2850 to 1.3015, reflecting cautious market sentiment ahead of President Trump’s pending “Liberation Day” tariff announcement. The pair’s inability to break decisively below key support near the lower boundary at 1.2850 suggests persistent underlying bullishness, despite near-term headwinds. Sterling’s recent retreat appears largely driven by broad-based U.S. dollar demand due to tariff-related risk aversion rather than specific UK-centric concerns, preserving an overall positive technical outlook.
Immediate technical support remains firmly established at the 1.2850 level, marking the bottom of the established trading range. A sustained break below this key support would be necessary to shift the short-term bias decisively bearish, targeting deeper supports toward the February low around 1.2760 and subsequently the psychological barrier at 1.2700. However, given sterling’s recent relative outperformance against major peers like the euro, Canadian dollar, and yuan over three- and six-month horizons, such a bearish breakdown currently appears less likely unless global trade tensions sharply escalate.
On the upside, resistance continues to hold steady near the psychological 1.3000 mark, followed closely by the March high at 1.3015. A convincing breakout above these resistance levels would confirm the resumption of sterling’s bullish trajectory, initially targeting early October highs above 1.3100. Given supportive fundamental dynamics—including relatively higher UK interest rate expectations and the lower likelihood of severe tariffs compared to other trading partners—GBP/USD bulls maintain the upper hand. Traders will closely monitor tariff developments, with a moderation of trade tensions likely providing the necessary catalyst to push the pair back toward recent 2025 highs.