GBP/USD Price Eyes Breakout as Bulls Confront $1.3593 Resistance Amid Trade Talks
The Pound is holding firm near $1.3570 against the US dollar in early European trade on Monday as the Greenback weakens across the board.
Quick overview
- The Pound is stable near $1.3570 against the US dollar as the Greenback weakens ahead of US-China trade talks.
- Concerns about the US economy are rising, with recent job reports showing downward revisions despite some job growth in May.
- UK data this week includes employment figures and GDP, with expectations of rising unemployment and pressure on the Bank of England.
- Technically, GBP/USD is testing resistance at $1.3593, with potential targets for a bullish breakout set at $1.3617 and $1.3644.
The Pound is holding firm near $1.3570 against the US dollar in early European trade on Monday as the Greenback weakens across the board. The US Dollar Index (DXY) has dropped back to just above 99.00 after gains on Friday as traders become cautious ahead of US-China trade talks in London later today.
Despite both Washington and Beijing confirming that trade delegates will meet to discuss terms, sentiment is on edge. President Trump tweeted on Truth Social: “The meeting should go very well.” But analysts are not so sure. As Saxo Markets said via Reuters: “Unless something material comes out of it, sentiment towards the dollar will remain fragile.”
In the US, concerns are growing about the economy. Friday’s Nonfarm Payrolls (NFP) report showed downward revisions of 95K jobs for March and April, despite a better-than-expected 139K jobs added in May. China’s economy is also facing headwinds, with May CPI falling 0.1% YoY, according to the National Bureau of Statistics.
UK Data Week: Jobs and Growth in Focus
The Pound is also steady ahead of a big week for UK data. Investors are waiting for:
- Tuesday: UK Employment Data (ILO Unemployment Rate expected to rise to 4.6%, highest since July 2021)
- Thursday: April GDP
- Also out: Average Earnings growth, expected at 5.5% YoY, putting pressure on the Bank of England
The BoE is expected to hold rates at 4.25% on June 19. But inflation stickiness – highlighted by April’s surprise CPI uptick – has some MPC members, like Megan Greene, warning of “second-round effects” in price pressures.
Technical Outlook: GBP/USD Bulls Hit $1.3593 Barrier
From a technical perspective, GBP/USD has bounced off the trendline and is testing the major resistance at $1.3593. The 1-hour chart shows a healthy bullish structure with higher lows and an RSI of 61.42, not overbought.The price is testing the supply zone $1.3593-$1.3617. A strong hourly close above this area, preferably on good volume, could clear the way to $1.3644.
Trade to Watch:
- Entry (long): Above $1.3593 on confirmation
- Stop-loss: $1.3544 (pivot support)
- Targets: $1.3617 and $1.3644
- Alternative (short): Sell at $1.3593 with RSI divergence
If GBP/USD doesn’t break, expect a pullback to $1.3513 or $1.3491 (trendline support)
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