The British pound has held above the 1.3600 level against the US dollar, extending its three-day winning streak, and may accelerate its upward momentum in the short term.
2026-05-07 14:40:50
The British pound (GBP/USD) continued its strength in early Asian trading on Thursday, trading around 1.3600, marking its third consecutive day of gains. Recent pressure on the US dollar index, coupled with a well-established bullish technical structure, has propelled the pound/dollar pair to maintain its overall upward trend.
As market expectations for further interest rate hikes by the Federal Reserve gradually cooled, the overall upward momentum of the US dollar weakened, and non-US currencies generally gained support. At the same time, market expectations for a possible agreement between the US and Iran also reduced the safe-haven demand for the US dollar.
The continued decline in the US dollar index provided significant support for the rise in the British pound against the dollar. Current market sentiment suggests that investors' expectations for the Federal Reserve to maintain a high-interest-rate policy for an extended period have cooled. The decline in international oil prices has eased market concerns about renewed inflation, prompting a reassessment of the Fed's future policy path.
Against this backdrop, the pound sterling against the dollar maintained a generally volatile but slightly bullish structure. However, the market remains cautious, awaiting further confirmation from the upcoming US non-farm payroll data. Strong US employment data could revive the dollar and limit the pound's upside; conversely, weak data could reinforce market bets on future Fed rate cuts, thus pushing the pound higher.
From the daily chart, the GBP/USD pair maintains a clear upward channel structure. The exchange rate rebounded after finding support at the lower boundary of the channel, indicating that the medium-term uptrend remains intact. Currently, the price continues to trade above both the 9-day exponential moving average (EMA) and the 50-day EMA, suggesting that the overall bullish structure still dominates the market.
The 1.3600 level has become a key support area for GBP/USD. Technically, the 14-day Relative Strength Index (RSI) is currently hovering around 60, indicating strong bullish momentum, but it hasn't yet entered extreme overbought territory, suggesting that GBP/USD still has some upside potential. On the upside, the 1.3758 area is the first major resistance level on the daily chart, coinciding with the 11-week high reached on May 1st. A decisive break above this level could lead to a further test of the 1.3869 area, the high since September 2021.
If the bullish trend continues, the exchange rate could even test the 1.4040 area near the upper trendline of the ascending channel. On the downside, the 1.3556 area, where the 9-day EMA is located, forms the first short-term support level, while the 1.3540 area near the lower trendline of the ascending channel is a key technical support zone. If this support area is subsequently broken, it may further retrace to the 1.3467 area, where the 50-day EMA is located.
From a comprehensive technical perspective, the medium- to long-term trend for GBP/USD remains bullish. The daily chart shows the upward channel remains intact, while the 4-hour chart reflects that although short-term bullish momentum has slowed, the overall trend has not yet turned bearish. As long as the exchange rate remains above the 50-day EMA, GBP/USD will generally continue to trend upwards with fluctuations. Future market direction will primarily depend on US non-farm payroll data, the dollar index's performance, and the market's repricing of the Federal Reserve's future policy path.
Editor's Summary : The current GBP/USD exchange rate is mainly supported by the overall weakening of the US dollar and a bullish technical structure. In the short term, easing expectations of a hawkish stance from the Federal Reserve and reduced demand for the US dollar as a safe haven continue to support the pound. From a technical perspective, the medium- to long-term upward trend of GBP/USD remains intact, but it has entered a consolidation phase at higher levels in the short term. Future market volatility may increase further, and investors should pay close attention to US non-farm payroll data, changes in Federal Reserve policy expectations, and the trend of the US dollar index.
As market expectations for further interest rate hikes by the Federal Reserve gradually cooled, the overall upward momentum of the US dollar weakened, and non-US currencies generally gained support. At the same time, market expectations for a possible agreement between the US and Iran also reduced the safe-haven demand for the US dollar.
The continued decline in the US dollar index provided significant support for the rise in the British pound against the dollar. Current market sentiment suggests that investors' expectations for the Federal Reserve to maintain a high-interest-rate policy for an extended period have cooled. The decline in international oil prices has eased market concerns about renewed inflation, prompting a reassessment of the Fed's future policy path.
Against this backdrop, the pound sterling against the dollar maintained a generally volatile but slightly bullish structure. However, the market remains cautious, awaiting further confirmation from the upcoming US non-farm payroll data. Strong US employment data could revive the dollar and limit the pound's upside; conversely, weak data could reinforce market bets on future Fed rate cuts, thus pushing the pound higher.
From the daily chart, the GBP/USD pair maintains a clear upward channel structure. The exchange rate rebounded after finding support at the lower boundary of the channel, indicating that the medium-term uptrend remains intact. Currently, the price continues to trade above both the 9-day exponential moving average (EMA) and the 50-day EMA, suggesting that the overall bullish structure still dominates the market.
The 1.3600 level has become a key support area for GBP/USD. Technically, the 14-day Relative Strength Index (RSI) is currently hovering around 60, indicating strong bullish momentum, but it hasn't yet entered extreme overbought territory, suggesting that GBP/USD still has some upside potential. On the upside, the 1.3758 area is the first major resistance level on the daily chart, coinciding with the 11-week high reached on May 1st. A decisive break above this level could lead to a further test of the 1.3869 area, the high since September 2021.
If the bullish trend continues, the exchange rate could even test the 1.4040 area near the upper trendline of the ascending channel. On the downside, the 1.3556 area, where the 9-day EMA is located, forms the first short-term support level, while the 1.3540 area near the lower trendline of the ascending channel is a key technical support zone. If this support area is subsequently broken, it may further retrace to the 1.3467 area, where the 50-day EMA is located.
From a comprehensive technical perspective, the medium- to long-term trend for GBP/USD remains bullish. The daily chart shows the upward channel remains intact, while the 4-hour chart reflects that although short-term bullish momentum has slowed, the overall trend has not yet turned bearish. As long as the exchange rate remains above the 50-day EMA, GBP/USD will generally continue to trend upwards with fluctuations. Future market direction will primarily depend on US non-farm payroll data, the dollar index's performance, and the market's repricing of the Federal Reserve's future policy path.
Editor's Summary : The current GBP/USD exchange rate is mainly supported by the overall weakening of the US dollar and a bullish technical structure. In the short term, easing expectations of a hawkish stance from the Federal Reserve and reduced demand for the US dollar as a safe haven continue to support the pound. From a technical perspective, the medium- to long-term upward trend of GBP/USD remains intact, but it has entered a consolidation phase at higher levels in the short term. Future market volatility may increase further, and investors should pay close attention to US non-farm payroll data, changes in Federal Reserve policy expectations, and the trend of the US dollar index.
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