GBPUSD bulls are pausing their advance following a five-day rally.

The pound eased from its new multi-week high of 1.2700 on Thursday, encountering resistance from significant levels at the 1.2700 zone, including the top of the daily Ichimoku cloud and the peaks of April 9-10.

Moreover, overbought conditions on the daily chart prompted traders to secure some profits from a five-day rally that gained momentum following Wednesday’s release of US inflation data, which propelled GBPUSD up by 0.8% for the day, marking its most significant one-day gains since April 29.

Although dips are expected to be limited (currently supported by the broken Fibonacci 61.8% level and the daily cloud base), the overall outlook remains bullish, with strong positive momentum and moving averages aligned in a bullish formation, indicating positioning for the continuation of the broader uptrend from the April 22 low of 1.2299.

The broken 100-day moving average (1.2632) serves as the next support level, followed by the 55-day moving average (1.2601) and key support levels in the 1.2550/40 zone (comprising the Fibonacci 38.2% retracement of the move from 1.2299 to 1.2700 and the 200-day moving average), which are expected to contain significant downward movements and maintain the bullish sentiment.

The pound, sensitive to risk, received renewed support from softer-than-expected US inflation figures, which could potentially push the US central bank closer to initiating policy easing. Additionally, comments from some Monetary Policy Committee (MPC) members advocating for unchanged Bank of England rates added to the pound’s strength.

Market participants are eagerly awaiting the release of US weekly jobless claims, with last week’s figure exceeding consensus expectations at 219K. A similar outcome this week could provide further momentum and propel the price above the pivotal 1.2700 barrier.

Res: 1.2700; 1.2709; 1.2753; 1.2784
Sup: 1.2632; 1.2601; 1.2569; 1.2540