Pound Surges to 3-year highs amid broad Dollar weakness

[Redator]

The Pound wasn't the best performer in the beginning to this month, amid a weakening UK Economy and a still too-high inflation which is forcing the Bank of England to hold higher rates – Cuts are not expected until the end of Summer.

Unemployment Rate in the UK ticked up, GDP and Retail Sales ticked down – Only PMIs released last week surprised to the upside.

Markets are forward looking, and players are looking ahead at better prospects for the Country which separated from the European Union in 2016.

Effectively, British Trade is expected to meet less barriers ahead with historic deals reached between the EU and the US.

On the other hand, the US Dollar has found some more weakness as markets are turning the page on the Israel-Iran conflict.

Nothing new from the FOMC and a still erratic US President have done enough to give more reasons from market players to shift their positions out of the US compared to the past 20 years, hurting the USD (not even mentioning the recent Credit Downgrades) – Despite the US Economy still largely beating expectations.

Let's take a look at the most recent up-move in the Cable and spot levels of interest in the pair.

Read More: EUR/USD extends gains to 45-month highs, market eyes US labour data

GBPUSD Technical Analysis

Daily Chart

GBPUSD Daily Chart, June 26, 2025 – Source: TradingView

The Pound was subject to a 3-handle correction against the US Dollar earlier in the month – War flows shook markets and the UK released consequently weaker data.

An accumulation at the top of its daily range got met with selling flows, taking the pair to Monthly lows of 1.3376.

Since, the pair bounced precisely 4-handles higher, with Bulls taking support on the 50-Day Moving Average, reaching 3-year highs in the pair – Levels last seen since January 2022.

Daily RSI is still not indicating overbought levels in the pair and there is still close to 1000 pips of movement before hitting the high of its Ascending Channel.

4H Chart

GBPUSD 4H Chart, June 26, 2025 – Source: TradingView

Markets are trending upwards after buyers took support around the 1.34 Main Support Zone.

Current price action formed a tight bull channel, however overbought RSI hints at a consolidation before continuing a potential rally towards the high of the channel, where markets may find Potential Resistance around the 1.38 psychological level.

Any correction from here hints at a re-test of the 1.36 Pivot Zone that served as resistance in the previous consolidation.

1H Chart

GBPUSD 1H Chart, June 26, 2025 – Source: TradingView

Looking closer, buyers are still largely in control and momentum is strong, with prices currently rebounding on the Steep upwards trendline and the 1H MA 20.

Pound bulls will have to break above the Immediate Resistance at last swing high (1.3765) to maintain their strength.

A failure to do so will hint at higher probabilities of a break of the trendline for a return to the aforementioned 1.36 pivot zone, in confluence with the 1H MA 50.

Safe Trades!

Opinions are the authors'; not necessarily that of OANDA Business Information & Services, Inc. or any of its affiliates, subsidiaries, officers or directors. The provided publication is for informational and educational purposes only.
If you would like to reproduce or redistribute any of the content found on MarketPulse, an award winning forex, commodities and global indices analysis and news site service produced by OANDA Business Information & Services, Inc., please refer to the MarketPulse Terms of Use.
Visit https://www.marketpulse.com/ to find out more about the beat of the global markets.
© {CURRENT_YEAR} OANDA Business Information & Services Inc.