This morning, GBP/USD is trading above 1.3620 – its highest level since early July.
The bullish momentum is largely driven by diverging central bank policies:
Although rates remain comparable, the outlook differs. UK inflation remains persistent, making rate cuts risky, while in the US, political pressure from President Trump is adding weight to expectations of policy easing.
The pound also gained support from optimism surrounding Trump’s state visit to the UK. Media reports suggest agreements worth around $10 billion may be announced during the visit.
Earlier this month, price action showed lower highs and lower lows, forming a bearish A→B→C→D structure. At that time, we expected:
However, the landscape has shifted:
That said, the RSI is nearing overbought territory, hinting at a possible pullback.
Support levels could be:
In the near term, bulls could aim for the upper boundary of the yellow channel, with upcoming announcements from the Fed and Bank of England possibly playing a decisive role.
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