GBPUSD Price Forecast: Short-Term Bullish Setup Before Key Resistance Test
GBPUSD has been consolidating on the 1-hour time frame, and after several sessions of sideways movement, price action suggests that a breakout could be imminent. Traders are now closely watching for a short-term bullish opportunity that could unfold if the breakout aligns with technical confirmation.
Based on Fibonacci retracement levels from the 15-minute chart, key price zones are coming into play. If GBPUSD manages to establish a bullish structure near these zones, buyers may step in for a rally toward the next resistance levels.
Technical Analysis
Daily Chart: Overall Structure
On the daily chart, GBPUSD has been trapped in a corrective range after recent volatility driven by economic data releases from both the US and UK. While the broader trend has shown weakness in the pound, the daily candles reveal that sellers are struggling to push price decisively lower, leaving room for a bullish recovery before any potential downside continuation.
4-Hour Chart: Momentum Building
The 4-hour chart indicates consolidation but with upward bias. Price has been respecting trendline support and is attempting to form higher lows. If bullish momentum persists, we may see GBPUSD push toward a key resistance zone, testing the conviction of sellers.
1-Hour Chart: Consolidation Phase
On the 1-hour timeframe, GBPUSD has been trading sideways but is now forming a potential breakout setup. This phase of consolidation often precedes strong directional moves. Traders should keep a close eye on candlestick closes above resistance to confirm a breakout.
15-Minute Chart: Fibonacci Levels in Focus
Using Fibonacci levels on the 15-minute chart, we’ve identified critical zones for intraday traders:
- First Level: 1.34600
- Second Level: 1.34500
If GBPUSD forms a bullish reversal pattern near either of these levels, such as a bullish engulfing or pin bar, it may signal entry opportunities for buyers.
The upside target for this bullish move sits at 1.35400, a zone where the pair previously created a double top structure on the 15-minute chart. This makes it a strong resistance area to watch.
read more : EURGBP Forecast Update: Retracement Before Major Bearish Move (August 26, 2025)
Key Technical Levels
- Immediate Support: 1.34500
- Bullish Entry Zone: 1.34600 – 1.34500
- First Upside Target: 1.35400
- Daily Resistance: 1.36000
- Critical Support Below: 1.34000
If GBPUSD breaks above 1.35400 with strong volume, further upside could extend toward 1.36000. However, rejection at 1.35400 could invite sellers back, potentially dragging price down toward 1.34500 again.
Fundamental Analysis
Bank of England (BoE)
The BoE’s monetary policy is central to GBP performance. With inflation in the UK still elevated compared to other developed economies, the BoE has maintained its policy rate at 5.25%, signaling that interest rates may remain restrictive for longer.
- Inflation remains above the 2% target, particularly in core services.
- Wage growth in the UK remains strong, adding pressure on the BoE to keep policy tight.
- Policymakers are cautious about over-tightening, given slower GDP growth.
Overall, the BoE’s stance favors GBP support in the near term, though economic slowdown risks could limit gains.
US Federal Reserve (Fed)
The Federal Reserve has taken a more cautious approach recently. After a rapid hiking cycle that brought rates above 5.25%, the Fed has shifted toward a wait-and-see stance as US inflation moderates.
- Headline inflation is easing but remains above target.
- Labor market data shows some cooling, with job growth slowing.
- Markets anticipate possible Fed rate cuts in 2024 if economic conditions weaken.
This divergence—BoE maintaining higher-for-longer policy vs. Fed possibly nearing a pause—creates relative support for GBPUSD in the short term.
Yield Differentials and Market Sentiment
The pound has gained relative strength due to higher UK yields compared to US Treasury yields. However, global risk sentiment continues to influence GBPUSD, as the pound tends to weaken during periods of heightened risk aversion.
read more : EURGBP Price Forecast Update: Fibonacci Levels and Market Outlook 28 AUG 2025
Market Sentiment
- Risk-On Scenarios: GBP tends to gain when investors seek higher-yielding assets.
- Risk-Off Scenarios: USD strengthens as a safe haven, putting pressure on GBPUSD.
- Geopolitical Factors: Energy costs and UK trade performance also weigh heavily on the pound.
Trading Strategy
- Bullish Intraday Setup:
- Look for bullish candlestick patterns near 1.34600–1.34500.
- Target 1.35400 with stops below 1.34400.
- Reversal Watch at 1.35400:
- If rejection occurs at this double-top resistance, sellers may regain control.
- Short opportunities could open with downside targets near 1.34600.
- Longer-Term Consideration:
- While short-term setups favor bulls, the daily structure still reflects broader uncertainty.
- Traders should stay flexible and adapt to macroeconomic releases from both the UK and US.
Conclusion
GBPUSD is entering a critical phase after consolidation on the 1-hour chart. Technicals suggest a potential short-term bullish move toward 1.35400, supported by Fibonacci retracement levels on lower time frames. However, traders must remain cautious as this zone also represents a major resistance where sellers could re-emerge.
Fundamentally, the Bank of England’s hawkish stance compared to the Federal Reserve’s cautious pause provides underlying support for GBP. Still, broader macro risks, including slowing UK growth and global risk sentiment, cap the pound’s upside potential.
In short, GBPUSD could see a bullish breakout in the near term, but the sustainability of the rally depends heavily on macroeconomic conditions and whether the pair can clear the 1.35400 resistance. Traders should combine technical confirmation with fundamental awareness to navigate the next moves effectively.
read more : EURGBP Forecast final bullish move before a big dip 25 AUG 2025
