GBPUSD Near-Term Outlook: Sterling Holds Firm as Dollar Softens

Macro Backdrop & Dollar Dynamics

The U.S. dollar remains on the defensive, pressured by:

• Fiscal concerns, including debt sustainability and widening deficits
• Trade policy uncertainty, following renewed tariff threats and unclear global trade strategies
• Wall Street sentiment leans bearish on the greenback, reflecting expectations for slower U.S. growth and a more dovish Fed.

This environment creates a supportive backdrop for GBPUSD upside as dollar weakness broadens across major pairs.

UK-Specific Drivers

• Sterling Strength: The pound has rallied ~8% YTD, now trading near three-year highs around 1.3575
• Positive Fundamentals:
  • UK-U.S. trade agreements have improved investor sentiment
  • Sticky inflation and robust services-sector performance add fuel to rate-hold expectations.
• BoE Outlook: Markets now expect the Bank of England to hold rates steady at the upcoming June 19 policy meeting following stronger-than-anticipated inflation data

This economic resilience keeps GBP well-bid in the short term.

Technical & Sentiment Landscape

• Resistance:
  • Initial resistance is seen at 1.3600–1.3615 – a break above could trigger a bullish continuation toward multi-year highs
• Support:
  • Immediate support at 1.3470–1.3500 – failure to hold may signal short-term correction
• Trend Bias: Momentum remains bullish, though indicators like RSI suggest the pair is nearing overbought territory

Summary:

• Bias: Bullish, with scope to retest 1.3600–1.3615
• Risk Factors: FOMC minutes, U.S. inflation data, UK economic surprises
• Watch For BoE forward guidance and U.S. macro shifts to confirm or disrupt the current trajectory

EURUSD – H2 Timeframe

When the price broke above the previous high on the 2-hour timeframe chart of EURUSD, it left behind an inducement, which the price had already swept at the time of this writing. The bullish sentiment is further supported by the confluence from the trendline support and the horizontal support near the drop-base-rally demand zone highlighted on the chart.

Analyst's Expectations: 

Direction: Bullish

Target- 1.36033

Invalidation- 1.35003

CONCLUSION

You can access more trade ideas and prompt market updates on the telegram channel.