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Today, the GBP/USD pair is showing strong growth, reaching levels last seen in October 2024. This is driven by bearish momentum in the U.S. dollar, which has created favorable conditions for the British pound.
The decline in the U.S. Dollar Index to a new yearly low, in response to trade tariffs introduced by U.S. President Donald Trump, has heightened expectations for the Federal Reserve to begin a rate-cutting cycle sooner. As a result, U.S. Treasury yields have dropped sharply, undermining the dollar.
At the same time, the Bank of England is expected to cut rates more gradually than other central banks, including the Fed, which provides additional support to the pound. This further fuels demand for the British currency, helping the GBP/USD pair to rise.
From a technical perspective, the breakout above the psychological level of 1.3000 confirms the exit from a multi-week trading range, opening the way toward new targets. There is a high probability that GBP/USD could soon reach the 1.3180 area and the round level of 1.3200. However, it's important to note that oscillators on the daily chart are approaching overbought territory. Therefore, initiating new long positions at this moment may be premature—it's better to wait for consolidation or a short-term pullback.
On the other hand, the 1.3000 level now acts as a key support. A break below it would shift the bias in favor of the bears, pushing the pair back into its previous range. The nearest support is located around the 1.3100 round level, which the pair may revisit during consolidation, or to the 1.3056–1.3100 zone before potentially continuing its upward movement.
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