GBPUSD Outlook: Technical Strength Meets Global Uncertainty

This week, market participants are closely monitoring a series of high-impact economic events that could drive volatility across multiple asset classes. Key releases, including employment data from the US and Canada, Eurozone monetary policy decisions, and inflation updates from Switzerland, are likely to shape short-term price action in major currency pairs. Against this backdrop, GBPUSD continues to trade within a well-defined uptrend, supported by technical momentum and evolving macroeconomic fundamentals.

Wednesday 02:30 am (GMT+2) – Australia: GDP q/q (AUD)
Wednesday 09:30 am (GMT+2) – Switzerland: CPI m/m (CHF)
Wednesday 15:15 (GMT+2) – USA: ADP Non-Farm Employment Change (USD)
Wednesday 17:00 (GMT+2) – USA: ISM Services PMI (USD)
Thursday 15:15 (GMT+2) – Europe: Main Refinancing Rate (EUR)
Thursday 15:30 (GMT+2) – USA: Unemployment Claims (USD)
Friday 15:30 (GMT+2) – Canada: Employment Change (CAD)
Friday 15:30 (GMT+2) – USA: Non-Farm Employment Change (USD)

Since establishing a low at 1.20987 on January 13, GBPUSD has maintained a clear upward trajectory, characterized by a series of higher highs and higher lows. The initial shift in trend was signaled by the formation of a Hammer candlestick reversal pattern, marking the conclusion of the preceding downtrend and the emergence of a new bullish phase.

The bullish direction was further reinforced by the development of a failure swing pattern, a classic technical reversal signal that confirmed the directional shift to the upside. Adding to the positive momentum, the formation of a “Golden Cross”, where the 20-period Exponential Moving Average (EMA) crossed above the 50-period EMA, further strengthened bullish sentiment and technical confirmation of the uptrend.

Momentum indicators continue to support the bullish outlook. The Momentum Oscillator remains firmly above the critical 100 threshold, indicating sustained upward pressure, while the Relative Strength Index (RSI) holding above 50 reflects ongoing buying dominance.

That said, emerging negative divergence between price action and the Momentum Oscillator suggests a potential weakening of bullish momentum, raising the risk of a near-term corrective pullback.

Should the buyers maintain market control, traders may direct their attention toward the four potential resistance levels below:

1.29007: The initial resistance level is established at 1.29007, which mirrors the 261.8% Fibonacci Extension drawn from 1.25491 to 1.23318.

1.29681: The second price target is set at 1.29681, representing the 261.8% Fibonacci Extension drawn from 1.27150 to 1.25586.

1.32211: The third price objective is observed at 1.32211, corresponding with the 423.6% Fibonacci Extension drawn from 1.27150 to 1.25586.

1.34094: An additional upside target is projected at 1.34094, mirroring the 423.6% Fibonacci Extension drawn from 1.25224 to 1.22483.

Should the sellers take market control, traders may consider the four potential support levels listed below:

1.27150: The initial support level is seen at 1.27150, corresponding to the daily high recorded on March 26.

1.26159: The second support level is estimated at 1.26159, representing the weekly Pivot Point, PP, estimated using the standard methodology.

1.25491: The third support level is identified at 1.25491, reflecting a peak marked on February 5.

1.23318: An additional downside target is 1.23318, mirroring the trough from February 11.

Deutsche Bank is warning that the US dollar could lose its traditional role as a safe-haven currency as global politics and economies shift quickly. The bank says the changes happening now — including tensions over trade and the US pulling back on its security role in Europe — are happening so fast they can’t be ignored.

This warning comes after the dollar unexpectedly fell on Tuesday, surprising investors who had been betting it would stay strong. Deutsche Bank says the dollar’s relationship with risky assets is weakening, and the growing US trade deficit is another concern. The bank is now more open to the idea that the dollar could enter a longer-term weakening trend.

On the other hand, UK banks have borrowed over £10 billion from the Bank of England — the most since the Covid pandemic — as the central bank reduces the extra cash it pumped into the financial system in recent years. The Bank of England is trying to shift how it supports banks, moving away from buying government bonds (gilts) and instead offering short-term loans in exchange for collateral.

This change is making it harder for banks to access cash smoothly, which could cause market volatility. Banks and industry groups are asking the Bank of England to make the process easier, by offering longer loan options and simplifying paperwork to avoid delays, especially if markets become stressed.

With a series of high-impact economic events scheduled for this week, including key employment data and central bank decisions, market participants should prepare for elevated volatility across major currency pairs. GBPUSD remains in a well-established uptrend, supported by both technical and fundamental factors, though signs of slowing momentum suggest the potential for a corrective pullback. Broader macroeconomic uncertainties — from shifts in US trade and security policies to evolving liquidity conditions in the UK — will likely play a critical role in shaping the pair’s next directional move. Traders are advised to monitor key support and resistance levels closely while staying responsive to incoming data and geopolitical developments.