GBP/USD holds near three-year high as pound shows resilience

By RoboForex Analytical Department

The GBP/USD pair remains steady around 1.3515, maintaining its strength after reaching a three-year high on 26 May. The British pound has shown greater stability than other major currencies amid rising geopolitical and economic pressures.

Pound supported by global tensions and domestic optimism

Ongoing trade tensions between the US and China continue to weigh on market sentiment, indirectly supporting the pound. President Donald Trump’s decision to double tariffs on steel and aluminium triggered an intense backlash from China, which accused the US of breaching the recent trade deal and threatened to retaliate.

At the same time, optimism about the British economy is helping to sustain demand for the pound. The International Monetary Fund (IMF) upgraded the UK’s 2025 growth forecast to 1.2% from 1.1%. However, it also warned Chancellor Rachel Reeves of the need to exercise strict fiscal discipline ahead of her budget presentation on 11 June.

Inflation remains elevated, particularly in the food sector, where prices rose by 4.1% in May – the highest increase since February 2024. According to Kantar, this has prompted UK consumers to seek more discounts and shift towards cheaper brands.

Due to persistent inflation, the market is currently pricing in only a 40-basis-point rate cut from the Bank of England this year.

Technical analysis of GBP/USD

On the H4 chart, GBP/USD continues to develop the fifth wave of growth towards 1.3648. The market is consolidating near 1.3515 and is expected to break upwards towards 1.3616, with the wave potentially extending to 1.3648. If the market breaks downwards, a further correction to 1.3400 is possible before resuming growth. The MACD indicator confirms the bullish scenario, with its signal line above zero and pointing firmly upwards.

On the H1 chart, GBP/USD formed a consolidation range around 1.3515 and broke upwards, nearly hitting the local target of 1.3559. The market is now undergoing a correction, targeting 1.3489. Once this pullback is complete, the next growth wave may reach 1.3583. The Stochastic oscillator supports this view, with its signal line below 50 and heading sharply downwards towards 20, suggesting room for a short-term dip before renewed upward momentum.

Conclusion

GBP/USD remains firm near multi-year highs, supported by a mix of global trade tensions, domestic economic optimism, and elevated inflation. Technically, the outlook remains bullish, with key targets at 1.3583, 1.3616 and 1.3648. Support levels are at 1.3489 and 1.3400 in the event of a pullback. The pound’s relative stability continues to position it as one of the more resilient major currencies in the current environment.

Disclaimer

Any forecasts contained herein are based on the author's particular opinion. This analysis may not be treated as trading advice. RoboForex bears no responsibility for trading results based on trading recommendations and reviews contained herein.