GBP/USD Eyes December High as Ascending Channel Remains Intact

British Pound Outlook: GBP/USD

GBP/USD clears the February high (1.2716) to register a fresh yearly high (1.2754), and the exchange rate may further retrace the decline from the December high (1.2812) as it continues to trade within an ascending channel.

GBP/USD Eyes December High as Ascending Channel Remains Intact

GBP/USD seems to be unfazed by the shift in US trade policy as it extends the advance from the start of the week, and the rally in the exchange rate may persist as it carves a series of higher highs and low.

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In turn, GBP/USD may continue to approach channel resistance even though President Donald Trump plans to impose reciprocal tariffs in April, and a further advance in the exchange rate may push the Relative Strength Index (RSI) closer to oversold territory as the oscillator climbs back towards its highest level since September.

With that said, GBP/USD may further retrace the decline from the December high (1.2812) as it carves a series of higher highs and lows, but the exchange rate may struggle to extend the advance from the start of the week as it approaches channel resistance.

GBP/USD Price Chart –Daily

Chart Prepared by David Song, Senior Strategist; GBP/USD on TradingView

GBP/USD registers a fresh yearly high (1.2754) as it continues to trade within an ascending channel, with a close above the 1.2710 (23.6% Fibonacci extension) to 1.2760 (61.8% Fibonacci retracement) zone raising the scope for a move towards the December high (1.2812).
A break/close above 1.2900 (23.6% Fibonacci retracement) to 1.2910 (50% Fibonacci extension) area opens up 1.3010 (61.8% Fibonacci extension), but GBP/USD may struggle to extend the recent series of higher highs and lows as it approaches channel resistance.
Lack of momentum to close above close above the 1.2710 (23.6% Fibonacci extension) to 1.2760 (61.8% Fibonacci retracement) zone may push GBP/USD back towards the weekly low (1.2579), and failure to hold above channel support may bring the 1.2390 (38.2% Fibonacci extension) to 1.2446 (May low) zone back on the radar.

Additional Market Outlooks

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Euro Forecast: EUR/USD Vulnerable to ECB Rate Cut

US Dollar Forecast: USD/JPY Rebound Retrained by Slowdown in US PCE

AUD/USD Negates Ascending Channel amid Five-Day Selloff

--- Written by David Song, Senior Strategist

Follow on Twitter at @DavidJSong

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