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GBPUSD increases odds of bullish continuation.
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A break above 1.3440 could hand over control to the bulls.
GBPUSD has broken above a bearish channel, as Moody’s credit downgrade of the US economy and improving EU-UK trade relations have brought bullish momentum into play.
A close above the 20-day simple moving average (SMA), along with a positive slope in the momentum indicators, continues to favor the bulls. However, the 1.3400–1.3440 resistance zone could still pose a challenge. A decisive break above this ceiling is likely needed to trigger a swift rally toward the 1.3645 resistance zone. Beyond that, the 1.3750 level - aligned with the 2021 high - may be the next obstacle before the 1.3830 barrier.
On the downside, the 1.3260 support base could keep bearish pressure in check. If that level fails, the price may drop toward the 50-day SMA, located near the 23.6% Fibonacci retracement of the 2025 uptrend at 1.3130, or potentially down to the lower boundary of the downward-sloping channel at 1.3070. A further decline could then target the 38.2% Fibonacci level at 1.2933 and the 200-day SMA at 1.2870.
In summary, GBPUSD is shaping a bullish path, with investors awaiting a confirmed break above the 1.3440 level to ramp up buying activity.
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