GBP/USD Price Forecast; Pound Holds Above 1.37 As Four-Year High Near 1.3850 Keeps 1.40 In Sight

GBP/USD: Sterling Pushes Into Multi-Year Highs While Dollar Tries To Stabilize

GBP/USD intraday move and Senate-driven Dollar rebound

GBP/USD is trading near 1.3760, down about 0.30% on the day after failing to hold above 1.3800. The pair backed off Thursday’s highs just over 1.3850 as the USD caught a bid from Washington headlines. The US Senate advancing a spending deal that reduces shutdown risk gave the Greenback short-term support and triggered profit-taking in sterling near four-year highs around 1.3870. The move does not erase the week’s broader upside: cable still trades far above the 1.3700 area that capped it earlier in the month and now acts as an initial demand zone.

GBP/USD structure: four-year highs, rising channel and key price zones

On the broader chart, GBP/USD is locked inside an ascending channel that started building in 2023. This week’s spike to just above 1.3850 put price within touching distance of the four-year resistance band at 1.3870. The lower side of the structure sits around the mid-1.36s, while the midline has been rotating near 1.37–1.38. The recent bounce from 1.3750 and holds around 1.3720–1.3700 confirm that this band has flipped from resistance into support. As long as cable trades above 1.3700 on a daily closing basis, the path of least resistance remains pointed toward 1.39 and higher. A clean break below 1.3700 would be the first serious warning that the channel is losing momentum and a retest of the low-1.36s is on the table.

Golden Cross on GBP/USD confirms Sterling trend control

The daily GBP/USD chart now shows the 50-day moving average crossing above the 200-day moving average, the classic “Golden Cross” that many desks use as a medium-term trend filter. Importantly, spot is not just above both averages but is trading meaningfully higher, near 1.3760, after hitting 1.3850 earlier in the week. That configuration tells you the uptrend is already established rather than just starting. Dips into the 1.36–1.37 region align with the moving average cluster and the channel’s mid-zone, so pullbacks toward those levels are still technically healthy within a bullish structure, not evidence of a top unless 1.36 breaks decisively.

GBP side: Bank of England risk premium embedded inside GBP/USD

The GBP leg of GBP/USD is being supported by expectations that the Bank of England will stay cautious on rate cuts relative to the Federal Reserve. With UK services inflation and wage dynamics still elevated, markets are unwilling to price an aggressive easing path. That stance injects a risk premium into sterling and helps explain why the pair can sit near 1.3800–1.3870 even as the USD gets bursts of support from US fiscal headlines. Traders heading into the next BoE meeting are effectively paying up for GBP exposure on the view that the Bank will tolerate tighter financial conditions for longer, which supports levels like 1.3830 and keeps the 1.3870 high in play.

USD side: shutdown relief, Fed at 3.75% and Warsh headlines

On the US side, USD dynamics are shifting from pure downside to a more two-way trade. The Fed left its policy rate at 3.75%, matching expectations, but the real story has been politics and data. A Senate compromise that moves funding legislation forward removes immediate shutdown risk and shores up the Greenback after a period where global funds were cutting US exposure. At the same time, hotter producer prices and the nomination of Kevin Warsh as the next Fed chair candidate tilt expectations a bit more hawkish at the margin. That mix explains why GBP/USD can retreat from 1.3830–1.3850 back toward 1.3760 even with no fresh negative surprise from the UK. However, earlier episodes where the dollar failed to extend gains after similar supports show that US strength still looks tactical, not a fully rebuilt bull trend.

Short-term trading map: supports, resistances and invalidation on GBP/USD

Intraday, GBP/USD has carved a clean ladder of levels. Immediate resistance sits at 1.3830, the area that capped price in the early London session, followed by the recent spike high just above 1.3850. Beyond that, the four-year cap near 1.3870 is the key level that needs a daily close above to open the way toward the channel ceiling around 1.3960. On the downside, the first meaningful support is the 1.3750 pivot where buyers already stepped in. Below that, the 1.3720–1.3700 band is the line that has to hold to keep the bullish structure intact. A sustained break under 1.3700 would point toward the low-1.36s and signal that the market is no longer treating every dip as a buying opportunity. Until that happens, the technical playbook still reads buy-the-dip rather than fade-the-rally.

Bank and market projections: mapping 1.3960, 1.40, 1.4060 and 1.4475

Medium-term projections derived from the bullish channel in GBP/USD focus on the 1.39–1.41 area. The upper edge of the channel is currently projected around 1.3960, providing the first structural target once 1.3870 is broken on a closing basis. A move above 1.3960 naturally draws price toward the psychological 1.4000 handle, where options strikes and prior congestion cluster. Just above, a lighter resistance shelf appears around 1.4060, and beyond that the chart clears toward roughly 1.4475. That far target, not visited since before the Brexit shock, would require a sustained period of USD softness and persistent BoE restraint on rate cuts, but the map is there: from 1.3760, a run to 1.40 is roughly 2% higher, while 1.4475 would represent about 5%–6% appreciation over coming quarters.

Sentiment and positioning: Sterling no longer a crowded short vs USD

Positioning around GBP/USD has shifted from aggressive shorting of sterling to a more balanced stance where traders are timing entries rather than questioning the uptrend. The break toward 1.3850 flushed out residual shorts that were leaning on the 1.37–1.38 resistance band. Now, sentiment is more nuanced: macro funds see value in owning GBP on dips given UK–US policy divergence, while fast money is happy to fade spikes above 1.3850 if US data surprise on the upside. This push-and-pull dynamic explains why the pair can overshoot toward 1.3870 and then slide back under 1.3800 within a single news cycle. Still, the repeated defense of 1.3750 and 1.3700 shows that real money buyers remain active on weakness rather than exiting the story.

GBP/USD stance: directional bias and trade conclusion based on current data

Combining price structure, macro backdrop and sentiment, GBP/USD remains in a structurally bullish phase. The Golden Cross on the daily chart, the intact rising channel, and the sequence of higher highs toward 1.3850–1.3870 all point to sterling strength against the USD. Short-term US Dollar support from the Senate funding breakthrough, Fed at 3.75% and Warsh-related headlines can drag the pair back toward 1.3750–1.3700, but those moves still look corrective, not like the start of a bear market in GBP. With spot near 1.3760, supports at 1.3750 and 1.3700, and upside markers at 1.3960 and 1.40+, the directional call on the current information set is clear: GBP/USD = Buy, with a bullish view as long as price holds above the 1.36–1.37 support zone.

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