GBPUSD Forecast: Pound Sterling eyes 1.1500 after overcoming key hurdles

GBPUSD has managed to build on Friday's recovery gains and climbed above 1.1400 despite having started the week with a bearish gap. The short-term technical outlook suggests that the pair is gathering bullish momentum and that it could test 1.1500 next.

Following Thursday's heavy selloff that was triggered by the Bank of England's (BoE) dovish tone, the Pound Sterling (GBP) benefited from risk flows ahead of the weekend. The market mood remains slightly positive early Monday with the US stock index futures rising between 0.4% and 0.5%.

If risk flows continue to dominate the financial markets in the second half of the day, the US Dollar (USD) is likely to have a hard time finding demand as a safe haven.

Over the weekend, The Guardian reported that British Finance Minister Jeremy Hunt was planning to announce 60 billion Pounds of tax rises and at least 35 billion Pounds of spending cuts. The BoE said that they have not taken potential austerity measures or tax increases into account when deciding on the policy action. Hence, the BoE's dovish stance could be reaffirmed in case the UK government decides to run a tighter fiscal policy. Nevertheless, the USD's market valuation is likely to continue to drive GBPUSD's movements in the near term.

There won't be any high-tier data releases from the United States (US) in the second half of the day and investors are likely to stay focused on the risk perception.

GBPUSD Technical Analysis

GBPUSD faces immediate resistance at 1.1460, where the 50-period Simple Moving Average (SMA) on the four-hour chart is located. The pair retreated slightly after having tested this hurdle earlier in the session, suggesting that additional gains are likely once that level is confirmed as support. On the upside, 1.1500 (psychological level, static level) aligns as the next bullish target ahead of 1.1550 (static level).

1.1400 (psychological level) aligns as first support before 1.1375 (100-period SMA). Only a four-hour close above the latter could be seen as a convincing bearish development and pave the way for an extended slide toward 1.1300 (psychological level, static level).