GBP/USD Price Forecast: Technical Charts Indicate Strong Uptrend Towards 1.3720

Currently, the GBP/USD price forecast points to a new bullish rally, targeting the resistance level at 1.3720. Traders are closely monitoring technical chart patterns as the pound shows strong momentum against the dollar. This article will explore the key drivers and levels behind this potential rise. GBP/USD Price Forecast: Technical Indicators Signal New Uptrend The price forecast for GBP/USD shows a clear technical setup for a rise towards 1.3720. Recently, the currency pair rebounded from the key support zone near 1.3500. This level aligns with the 50-day moving average, prompting active buying from bulls. Current momentum indicators support the bullish outlook. The Relative Strength Index (RSI) has climbed above 60, indicating increasing buying pressure. Additionally, the MACD histogram shows a bullish crossover, which has appeared on the daily chart, confirming a shift in short-term momentum. The key resistance level is at 1.3720, which is the high point before October 2024. A successful breakout could open the door to 1.3800. On the downside, recent support is at 1.3580, and a drop below 1.3500 would invalidate the bullish forecast. Fundamental Factors Supporting GBP/USD Rise The price forecast for GBP/USD is also supported by fundamental factors. The Bank of England (BoE) maintains a hawkish stance, with policymakers cautious about rate cuts. In contrast, the Federal Reserve is leaning towards easing policies. This policy divergence is favorable for the pound. UK inflation remains elevated, with the latest Consumer Price Index (CPI) at 3.2%, exceeding the BoE's 2% target, leading the central bank to be cautious about rapid rate cuts. Meanwhile, US inflation has adjusted to 2.8%, supporting the Fed's dovish narrative. Market expectations reflect this divergence. Traders anticipate a 60% probability that the BoE will maintain rates in March. Conversely, the probability of a Fed rate cut in March stands at 70%. This interest rate differential supports the upside potential for GBP/USD. Geopolitical factors are also at play. The UK has reached a new trade agreement with the EU, reducing uncertainties related to Brexit. At the same time, US trade policies are under scrutiny, with tariff announcements putting pressure on the dollar. Impact of Economic Data Calendar Upcoming data releases could accelerate the rise of GBP/USD. Key events include: Strong UK GDP data will boost the pound, while weak US employment data will pressure the dollar. In either scenario, the target of 1.3720 is supported. Analysis of GBP/USD Chart Patterns The price forecast for GBP/USD largely relies on chart patterns. The daily chart shows a bullish flag formation. This pattern consists of a sharp rise followed by a period of consolidation. The flagpole formed between January 10 and January 20, while the consolidation unfolded from January 21 to January 28. Bullish flags typically resolve in the direction of the prior trend. In this case, the trend points upward, and the measured target of the flagpole suggests 1.3720.