GBP/USD Climbs Back Above 1.33; Bullish Momentum Intact as UK Yields Underpin
Technical Analysis:
Sterling strengthened steadily through Friday’s session, closing significantly higher at 1.3315, up 0.58%, after trading in a wide intraday range of 1.3213–1.3323. The pound benefited notably from rising UK gilt yields, which continue to provide robust fundamental support, slightly outperforming U.S. Treasuries as markets digest the implications of the recent UK–U.S. trade deal and the Bank of England’s 25-basis-point rate cut. The close back above the pivotal 21-day moving average at 1.3295 signals a bullish resumption and suggests traders are positioning positively ahead of the crucial U.S.–China trade negotiations.
From a technical perspective, GBP/USD’s successful recovery above its 21-DMA (1.3295) is particularly bullish and indicates near-term momentum favors further gains. Immediate resistance now emerges at the nearby 10-day moving average at 1.3324; a clear breach and daily close above this level would likely trigger renewed buying interest and set the stage for an extension towards the May 6 high at 1.3402. Ultimately, bulls will target the critical 2025 peak at 1.3445 recorded on April 28, a key technical barrier whose breach could lead to an acceleration toward the next significant psychological hurdle at 1.3500.
On the downside, short-term support is firmly anchored at Friday’s rising 10-hour moving average at 1.3295, closely followed by the intraday low at 1.3213—the lowest level traded over the past three weeks. A sustained break below this key support would risk additional losses toward the rising 21-DMA, currently positioned at 1.3178. However, with the macroeconomic backdrop currently supportive and UK yield advantages intact relative to low-yielding majors, any dips toward these lower support levels are likely to be viewed as opportunities for renewed bullish entries, limiting significant downside potential ahead of next week’s trade developments.