• The GBP/USD forecast turns positive, marking fresh 39-month top.
• The US dollar faces pressure due to mounting deficit concerns linked to Trump’s tax bill and coming up rate cuts.
• Technical outlook is bullish with the pair trading in ascending channel and nearing key resistance.

The GBP/USD forecast turns strongly bullish after a corrective pullback. The pair managed to breach the 39-month top amid favorable UK macroeconomic data and growing pressure on the US dollar.

The British pound gains traction following stronger than expected UK retail sales data and persistent inflation. The indicators led to speculation that the Bank of England may pause rate cut in the June meeting, aiding to GBP demand.

On the other hand, the US dollar stays under notable selling pressure. Political and fiscal uncertainties around “One Beautiful Bill” endorsed by President Trump has thickened the concerns related to inflating fiscal deficit. According to Congressional Budget Office, the bill may widen the deficit by $3.8 trillion due to tax breaks.

On top of that, Moody downgraded the US credit rating from AAA to AA1, citing spiraling debt to GDP projections. Meanwhile, the Fed officials have shown cautious tone due to economic uncertainty stemming from tariffs and stagflation risks. The markets are increasingly pricing in rate cuts in 2025.

GBP/USD Key Events Ahead

Due to US and UK bank holiday, there is no significant economic data or event due today.
 

GBP/USD Technical Forecast: Rising Channel Aiming for 1.4000

(Click on image to enlarge)

GBP/USD 4-hour chart

The GBP/USD pair remains in a rising channel, indicating strong bullish momentum. The immediate resistance emerges at 1.3600 resistance level while eying 1.3960 – 1.4000 zone as a long-term target. The immediate support appears at 1.3500 psychological level ahead of 9-day EMA at 1.3428, lower band of rising channel at 1.3310.

The 14-day RSI is approaching 70 level which indicates overbought scenario. Hence, a short-term correction can occur. If the bulls fail to sustain above 1.3445, the trend could weaken and drag towards 1.3300 to 1.3100 area.

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