The British pound rebounded significantly against the US dollar yesterday, rising nearly 1% intraday. The candlestick pattern formed a clear engulfing pattern, indicating strong buying support at lower levels and a shift in market sentiment from cautious to bullish. It continued to trade at higher levels during Friday's Asian session, hovering around 1.3600, and is expected to rise further in the short term.

From a fundamental perspective, the Bank of England's latest interest rate decision was a key driver. Although the Monetary Policy Committee voted 8-1 to keep the interest rate unchanged at 3.75%, internal disagreements emerged, with the chief economist supporting a rate hike, signaling a potentially hawkish stance. At the same time, the governor emphasized that energy prices could trigger a "double-dip inflation effect," implying that policy would tighten earlier if inflation were to pass on to wages. This statement reinforced market expectations of future policy tightening, thus supporting the strength of the pound.

In contrast, US data was slightly weaker. Core PCE growth remained at 3.5% year-on-year, in line with expectations but still relatively high, while first-quarter GDP only recorded 2%, lower than the market expectation of 2.3%, indicating a slowdown in economic momentum. This combination weakened short-term support for the US dollar and drove funds into the British pound.

Market expectations suggest that US data will be the dominant factor in the coming week. ISM manufacturing and services data, as well as the non-farm payroll report, will directly impact expectations regarding the Federal Reserve's policy path. If the data continues to be weak, the dollar may continue its correction, thus providing further support for the pound.

From a technical perspective, the GBP/USD daily chart shows clear signs of a recovery. After finding support around 1.3450, the price rebounded quickly, and the 1.3500 area has now become a short-term support level , indicating that the bulls have regained control. The current price is approaching the psychological and technical resistance level of 1.3600.

Looking at the upside, the 1.3650-1.3700 range forms a key resistance zone . A successful breakout would open up further upside potential, potentially targeting the previous highs. In terms of momentum indicators, the RSI has rebounded into a neutral-to-strong range, and the MACD shows signs of turning upwards, indicating strengthening short-term bullish momentum.

From a 4-hour chart perspective, the exchange rate has formed a clear upward channel, with short-term moving averages in a bullish alignment. The 1.3520-1.3550 area provides dynamic support . If the pullback does not break through this area, the short-term bias remains bullish; however, a break below this area could lead to a return to a consolidation pattern. Short-term resistance is concentrated around 1.3620 and 1.3680.

Editor's Viewpoint <br/>The current GBP/USD exchange rate movement is driven by a combination of "hawkish UK policy and slowing US growth," with bulls currently in control. However, given the flurry of US data releases, market volatility may intensify. If subsequent data continues to weaken, the exchange rate is expected to continue its rebound; conversely, it may return to range-bound trading. Overall, the short-term bias is bullish, but the risk of a rapid reversal driven by data should be carefully monitored.