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23/07/25
17
GBP/USD Stays Above 1.3500 Amid Improving Risk Sentiment
The GBP/USD currency pair remains firmly above the 1.3500 level during the European session, supported by a generally positive market sentiment. This environment, driven by developments in U.S. trade negotiations, suggests potential for further gains in the short term. The pair has maintained a consolidation pattern after consecutive advances on Monday and Tuesday, supported by a combination of technical indicators and an easing of US dollar demand.
The US dollar itself has experienced continued downward pressure, primarily due to geopolitical uncertainties and discord in US trade policy. Recent announcements, including a significant trade agreement between the United States and Japan, have contributed to a risk-on sentiment. The deal, which involves Japan investing heavily in the US and reducing reciprocal tariffs, has bolstered investor optimism and fueled gains in equity markets globally. US stock futures and the UK’s FTSE 100 indices have risen modestly, reflecting an appetite for riskier assets, although the dollar’s stability remains sensitive to potential shifts in market dynamics.
On the economic front, data releases such as the existing home sales report are unlikely to markedly influence market direction at this stage. Technical analysis indicates that GBP/USD still has room for upward movement before reaching overbought territory, with key resistance levels around 1.3540 and 1.3550. Should the pair break through this zone, the next targets include 1.3600 and 1.3630, respectively, represented by Fibonacci levels and moving averages. Conversely, support levels are observed at 1.3500, 1.3470, and 1.3450, providing a tangible downside buffer.
The British pound, as the UK’s official currency, remains sensitive to monetary policy signals from the Bank of England. The currency’s value is closely tied to interest rate decisions aimed at maintaining inflation near 2%. Strong economic data, including GDP growth, employment figures, and purchasing manager indexes, tend to bolster the pound, while signs of economic slowdown usually lead to depreciation. Overall, the GBP/USD outlook will likely continue to be influenced by geopolitical developments, market risk appetite, and economic indicators on both sides of the Atlantic.
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