GBP/USD Rally Faces Resistance as Traders Await FOMC Minutes

What to Know

• GBP/USD extended its uptrend and reached its highest level since June 17.
• The pair has advanced for six consecutive days as weak US macroeconomic data weighed on the dollar.
• The US economy created just 57k jobs last month, adding to concerns that momentum is slowing.
• The S&P Global services PMI slipped to 51.2 from 51.3, while the ISM non-manufacturing PMI fell to 54 from 54.5.
• Manufacturing data from ISM and S&P Global also showed deterioration in June.
• Market attention is shifting to the upcoming FOMC minutes and comments from Federal Reserve officials including Christopher Waller and New York’s John Williams.
• The latest Federal Reserve meeting ended with rates left unchanged, while nine members signaled support for hiking later this year.
• GBP/USD moved from a June low of 1.3143 to 1.3391, but it is now testing resistance around the 100-day moving average.
• Technical traders are watching 1.3305 as a key support area and 1.3500 as a major upside reference point.
• Some chart watchers see an inverted cup-and-handle structure, a pattern often associated with bearish continuation risk.

Sterling Extends Its Advance as US Data Softens

GBP/USD continued to attract buyers after another set of weak US economic releases reinforced the view that the American economy is losing some momentum. The pound’s rise against the dollar has now stretched across six consecutive days, taking the pair to its highest level since June 17. The move reflects a broad reassessment of the Federal Reserve outlook as traders weigh whether softer activity data could reduce pressure for additional tightening later this year.

The latest labor market figures added to that debate. The Bureau of Labor Statistics showed that the US economy created just 57k jobs last month, a result that strengthened the argument that hiring conditions may be cooling. For currency markets, labor data remains central because it shapes expectations around interest rates, wage pressure, consumer demand, and the ability of the Federal Reserve to maintain a restrictive policy stance.

Business surveys have also supported the weaker dollar narrative. ISM and S&P Global data showed that the manufacturing sector deteriorated in June, while service-sector updates released on Monday also came in below expectations. The S&P Global services PMI declined to 51.2 from 51.3, and the ISM non-manufacturing PMI moved down to 54 from 54.5. Although both readings remain above the line typically associated with expansion, the direction of travel has encouraged traders to question the durability of US growth.

FOMC Minutes Move Into Focus

With no major macroeconomic releases expected from the US or the UK this week, the upcoming FOMC minutes are set to become the dominant catalyst for GBP/USD. Traders will look for further detail on the policy debate that took place at the last Federal Reserve meeting, where officials left interest rates unchanged. The minutes may help clarify whether policymakers viewed the pause as a temporary move, a sign of caution, or a step toward a more patient stance.

The key detail from that meeting was that nine members signaled support for hiking later this year. That matters because the dollar could recover if the minutes show that policymakers remain concerned about inflation risks and are still prepared to tighten policy further. On the other hand, if the minutes emphasize slowing growth, weaker activity, or the need to evaluate incoming data, GBP/USD could remain supported as traders price in a less aggressive Federal Reserve path.

Comments from Federal Reserve officials will also be closely monitored. Christopher Waller and New York’s John Williams are expected to offer additional guidance on how policymakers are interpreting the latest data. Their remarks could influence expectations around future rate decisions, especially now that traders have fresh evidence of weaker job creation, softer services activity, and deteriorating manufacturing conditions.

UK Political Concerns Ease as Risk Sentiment Improves

The pound has also benefited from an improvement in UK-specific sentiment. Fears linked to a UK governance crisis have faded, with investors appearing more willing to give Andy Burnham a chance. That shift has helped reduce one source of political risk around sterling at a time when the dollar is already under pressure from economic data.

The improvement has not been limited to the currency market. UK stocks and gilts have also jumped recently, suggesting that investors have become more comfortable with the domestic backdrop. When political anxiety fades, sterling can benefit because international investors demand less of a risk premium for holding UK-linked assets. That broader confidence can support the pound, particularly when paired with doubts about the US outlook.

Even so, the pound’s advance remains vulnerable to changes in rate expectations. GBP/USD is not moving on UK optimism alone; it is also being driven by the relative policy outlook between the Bank of England and the Federal Reserve. If US yields stabilize or Fed officials push back against dovish interpretations of recent data, the dollar could regain some ground and challenge the latest sterling rally.

Technical Picture Shows a Rally Into Resistance

From a technical perspective, GBP/USD has rebounded sharply from its June low of 1.3143 to 1.3391 today. The pair has moved above the strong, pivot, reverse level on the Murrey Math Lines tool, a development that suggests buyers have regained short-term control. This upward momentum has encouraged bullish traders to focus on whether the pair can extend toward 1.3500.

However, resistance near the 100-day moving average is becoming a critical test. The pair has already met selling interest around that area, and some chart watchers argue that this is where profit-taking could begin to intensify. Moving averages often act as dynamic support or resistance because they are widely followed by systematic traders, discretionary technical traders, and market participants looking for trend confirmation.

There is also a potential bearish warning in the chart structure. GBP/USD has formed what some technical traders view as an inverted cup-and-handle pattern, which is commonly treated as a bearish continuation sign. If that pattern plays out, the recent rally could give way to renewed downside pressure as traders book profits and sellers defend resistance.

Key Levels for GBP/USD Traders

The immediate downside level to watch is 1.3305, identified as the strong, pivot, reverse level on the Murrey Math Lines tool. A move back toward that area would suggest that the recent rally is losing momentum and that sellers are beginning to reassert control. A break below it could deepen the bearish case, particularly if it coincides with hawkish Federal Reserve commentary or a stronger dollar reaction after the FOMC minutes.

On the upside, 1.3500 remains the major reference point for bullish traders. A break above the 100-day moving average would point to the possibility of more gains ahead and could shift attention toward that level. For traders using tactical scenarios, a bullish view has been framed around buying GBP/USD with a take-profit at 1.3500 and a stop-loss at 1.3300.

The bearish scenario is the mirror image of that setup. Some market participants may look to sell GBP/USD with a take-profit at 1.3300 and a stop-loss at 1.3500, especially if the pair fails to clear the 100-day moving average. This reflects the current tension in the market: momentum favors sterling in the short term, but resistance and pattern risk argue for caution.

FXCOINZ Market View

FXCOINZ sees GBP/USD at an important decision point. The macro backdrop has turned more supportive for sterling because US data has softened and traders are questioning whether the Federal Reserve will hike interest rates later this year. At the same time, the technical setup is not yet decisively bullish because the pair is testing a widely watched resistance zone and showing signs that profit-taking could emerge.

The next move may depend heavily on whether the FOMC minutes reinforce or challenge the market’s current interpretation of US weakness. If policymakers sound cautious and data-dependent, GBP/USD may continue to hold its recent gains. If officials emphasize that additional tightening remains possible, especially after nine members signaled support for hiking later this year, the dollar could recover and push the pair back toward nearby support.

For now, GBP/USD bulls need a clean move above the 100-day moving average to strengthen the case for continued upside. Bears need evidence that the resistance zone is holding and that momentum is fading. Until one side gains confirmation, traders may continue treating 1.3305 and 1.3500 as the key levels defining the current battlefield.

Frequently Asked Questions (FAQs)

Why is GBP/USD rising?

GBP/USD is rising because weak US macroeconomic data has pressured the dollar while sterling sentiment has improved. The pair has advanced for six consecutive days and reached its highest level since June 17.

What US data has influenced GBP/USD?

The US economy created just 57k jobs last month, while manufacturing data from ISM and S&P Global deteriorated in June. Services data also disappointed, with the S&P Global services PMI falling to 51.2 from 51.3 and the ISM non-manufacturing PMI declining to 54 from 54.5.

Why are the FOMC minutes important for GBP/USD?

The FOMC minutes are important because they may reveal how Federal Reserve officials viewed the economy and the interest-rate outlook at the last meeting. Traders will study them for clues on whether policymakers still support hiking later this year.

What did the Federal Reserve decide at its last meeting?

At the last meeting, Federal Reserve officials left interest rates unchanged. However, nine members signaled support for hiking later this year, keeping the policy outlook important for the dollar.

What are the key GBP/USD support and resistance levels?

Technical traders are watching 1.3305 as a key support area and 1.3500 as an important resistance and upside target. The 100-day moving average is also acting as a major resistance zone.

What is the bearish GBP/USD trade setup?

The bearish setup is to sell GBP/USD with a take-profit at 1.3300 and a stop-loss at 1.3500. This view depends on the pair failing to break resistance and resuming downside pressure.

What is the bullish GBP/USD trade setup?

The bullish setup is to buy GBP/USD with a take-profit at 1.3500 and a stop-loss at 1.3300. This view depends on the pair breaking above resistance and extending its recent rally.

What does the inverted cup-and-handle pattern suggest?

Some chart watchers view the inverted cup-and-handle pattern as a bearish continuation signal. If it plays out, GBP/USD could resume a downtrend as traders book profits after the recent rally.

Could GBP/USD continue higher?

GBP/USD could continue higher if it breaks above the 100-day moving average and the FOMC minutes support expectations for a less aggressive Federal Reserve. A confirmed breakout would shift attention toward 1.3500.

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