GBP/USD Analysis: Potential Pullback After 2-Week Rally as U.S. Dollar Finds Support

After a strong two-week rally, the GBP/USD currency pair is showing signs of possible short-term weakness, as the U.S. dollar stages a modest recovery. While the long-term trend remains bullish, recent price action and momentum indicators suggest a potential retracement may be on the horizon.

As of the latest update, GBP/USD is trading around $1.3299, with the pair currently hovering near the 50-day moving average (50MA) — a key level that’s providing short-term support. Earlier in the day, stronger-than-expected UK retail sales data gave the pound a temporary boost, but that initial upward momentum has started to fade, hinting at buyer exhaustion.

Key Technical Levels to Watch

• Support: A clear break below the 50MA could trigger further downside, potentially pushing GBP/USD toward the next support zone near $1.3200.

• Resistance: The immediate upside barrier remains the recent high at $1.3423. A confirmed move above this level would invalidate the short-term bearish outlook.

Chart Patterns & Indicators

On the 4-hour chart, the currency pair has formed a lower high, often seen as a signal of consolidation or a potential reversal. Meanwhile, the daily chart shows the MACD indicator beginning to roll over, which can be an early sign of declining momentum and a possible pullback in the near term.

Market Outlook

While the broader trend for GBP/USD continues to lean upward—supported by economic data and technical structure—the short-term picture suggests caution. Traders should keep an eye on technical support levels, momentum indicators, and upcoming economic events that could influence forex market sentiment.

Only a sustained breakout above $1.3423 will confirm a continuation of the bullish trend. Until then, the possibility of a corrective move remains on the table, particularly if the U.S. dollar strength persists.