GBP/USD outlook: Recovery picks up and cracks pivotal barriers, ahead of FOMC decision

Slobodan Drvenica Windsor Brokers

GBP/USD

GBP/USD extends recovery into second consecutive day and cracks important barriers at 1.2700/14 (psychological / 10DMA), but without break higher so far.

Monday’s bounce generated initial positive signal on completion of bullish engulfing pattern on daily chart, with today’s fresh extension higher, looking for sustained break above 1.2700/14 pivots to confirm signal and open way for further recovery.

Broader technical picture is predominantly bearish and warning about possible recovery may stall (south-heading 14-d momentum is approaching the centreline, MA’s mainly in bearish setup and converging 55/200DMA on track to for a death cross).

Such scenario could be well supported by anticipated Fed’s hawkish cut on Wednesday, as the US central bank may reduce the speed and diverge from expected rate cut path in 2025, due to new reality (inflation remains elevated and may rise further on expected strong boost to the US economy by Trump’s administration) that would further inflate dollar.

Broken 20DMA (1.2673) offers immediate support, guarding more significant 1.2600 zone (higher base / psychological).

Res: 1.2750; 1.2787; 1.2817; 1.2852

Sup: 1.2673; 1.2617; 1.2600; 1.2565

Interested in GBP/USD technicals? Check out the key levels

1. R3 1.2799
2. R2 1.2764
3. R1 1.2736
PP 1.2701
1. S1 1.2674
2. S2 1.2639
3. S3 1.2611

Author

Slobodan Drvenica

Windsor Brokers

Industry veteran with over 22 years’ experience, Slobodan Drvenica joined Windsor Brokers in 1995 when he was an active trader for more than 10 years, managing the trading desk and own account departments.

GBP/USD defends 1.3300 after strong UK PMI data

Following Thursday's sharp decline, GBP/USD clings to small gains above 1.3300 in the American session on Friday, supported by the upbeat UK Retail Sales and July PMI data. Nevertheless, the pair's upside remains capped as investors cling to a cautious stance amid a further escalation of tensions in the Middle East. The US July PMI data failed to trigger relevant price action.

EUR/USD remains below 1.1400 after mixed US PMIs

EUR/USD pressures daily lows below the 1.1400 mark in the American session on Friday. Mixed S&P Global PMIs, as manufacturing output contracted while services activity expanded in July, triggered no relevant market reaction. The focus remains in Middle East developments and inflation-related concerns.

Gold holds above $4,050 but momentum still missing

Gold builds on its modest intraday bounce and climbs above the $4,050 level on Friday, hitting a fresh daily high amid a modest US Dollar pullback. The fundamental backdrop, however, warrants some caution before confirming that the pullback from an over two-week high, touched on Wednesday, has run its course and positioning for any meaningful upside.

Ethereum: Derivatives interest in ETH improves, but signs of caution remain

Ethereum is hovering slightly below the $1,900 level, down 3% on Thursday following a slight expansion in derivatives interest. The top altcoin's open interest has increased to 14.60 million ETH, marking a 600K ETH increase over the past two days and its highest level since June 7.

XRP retreats as ETF interest cools

Ripple (XRP) slides toward the short-term $1.10 support on Friday, as broader crypto market sentiment weighs on crypto assets. The sell-off mainly stems from fears of inflation in the United States (US) amid the ongoing war in the Middle East and rising Oil prices.

US Dollar mid-year outlook: Exceptional currency, exceptional risks?

The US Dollar enters the second half of 2026 in a markedly different position from a year ago. The King currency has recovered, reflecting persistent US inflation, changing expectations for Fed policy, geopolitical tensions and renewed demand for defensive assets.