GBP/USD – Bulls extend gains for a second day, nearing key resistance levels

Cable extends its upward momentum, approaching key near-term resistance levels at 1.3588 (July 24 high) and 1.3618 (daily Ichimoku cloud top).

Sterling’s strength in the past two sessions has been underpinned by a weaker dollar—driven by fresh expectations for Fed rate cuts starting in September—and UK labor market data that reduces the urgency for the BoE to lower rates.

A decisive break above the psychological 1.3500 barrier, reinforced by the 55DMA, and 1.3541 (61.8% Fibonacci retracement of 1.3788/1.3141) has generated a fresh bullish signal, which will be confirmed if the pair closes above 1.3541.

The daily chart technicals have shifted firmly bullish, with northbound 14-day momentum entering positive territory, all moving averages aligned in a bullish setup, and a 10/100DMA bull cross forming.

Bulls are now testing significant resistance at 1.3588/1.3618, where stronger headwinds may emerge as the stochastic indicator sits in overbought territory.

Any pullbacks are expected to remain limited, ideally contained near the 1.3500 area, allowing for a healthy correction before a renewed push to break above 1.3588/1.3618. A firm move higher would expose the next major target at 1.3788 (2025 high and the strongest level since October 2021).

Res: 1.3588; 1.3618; 1.3635; 1.3700
Sup: 1.3541; 1.3500; 1.3464; 1.3419