GBPUSD has successfully completed a textbook retest of a major demand zone around 1.2650–1.2700, and we’re now seeing signs of bullish strength returning to the pair. After a corrective move from recent highs, price respected this zone with high precision, forming a strong bullish rejection candle that signals a potential reversal. With the market pushing back above 1.2850, we now have a clean higher low structure forming, indicating the next bullish leg is likely in play.
Technically, the 12H chart structure aligns well with a bullish continuation model. Price broke structure to the upside, came back to retest the neckline of the previous impulse leg, and is now bouncing with solid momentum. This is a classic demand zone reaction paired with a clean V-recovery pattern. As long as GBPUSD holds above 1.2700, I am targeting the 1.3400–1.3460 region in the coming weeks. The risk-reward setup here is highly favorable, with clearly defined invalidation below 1.2650 and upside potential aligned with macro sentiment.
On the fundamental side, GBP remains supported by persistent wage growth and sticky inflation in the UK economy, leading the market to price in fewer near-term rate cuts from the Bank of England. Meanwhile, the US dollar has started to show cracks as softer inflation data and slower NFP numbers last week are reducing expectations for further Fed tightening. This divergence in policy outlook between the BoE and the Fed is fueling GBPUSD upside, especially as the pair trades around key psychological levels.
Overall, with a strong confluence of technical bounce from demand, bullish fundamentals, and market sentiment shifting toward risk-on, GBPUSD looks well-positioned for further upside. A break and hold above 1.2900 will likely accelerate the move toward 1.3460. I'll be watching closely for momentum continuation setups as the pair builds bullish pressure in this zone.
Technically, the 12H chart structure aligns well with a bullish continuation model. Price broke structure to the upside, came back to retest the neckline of the previous impulse leg, and is now bouncing with solid momentum. This is a classic demand zone reaction paired with a clean V-recovery pattern. As long as GBPUSD holds above 1.2700, I am targeting the 1.3400–1.3460 region in the coming weeks. The risk-reward setup here is highly favorable, with clearly defined invalidation below 1.2650 and upside potential aligned with macro sentiment.
On the fundamental side, GBP remains supported by persistent wage growth and sticky inflation in the UK economy, leading the market to price in fewer near-term rate cuts from the Bank of England. Meanwhile, the US dollar has started to show cracks as softer inflation data and slower NFP numbers last week are reducing expectations for further Fed tightening. This divergence in policy outlook between the BoE and the Fed is fueling GBPUSD upside, especially as the pair trades around key psychological levels.
Overall, with a strong confluence of technical bounce from demand, bullish fundamentals, and market sentiment shifting toward risk-on, GBPUSD looks well-positioned for further upside. A break and hold above 1.2900 will likely accelerate the move toward 1.3460. I'll be watching closely for momentum continuation setups as the pair builds bullish pressure in this zone.
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Join our Forex Community Telegram group and connect with thousands of traders.
Hit the Link below
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Disclaimer
The information and publications are not meant to be, and do not constitute, financial, investment, trading, or other types of advice or recommendations supplied or endorsed by TradingView. Read more in the Terms of Use.