Technical Analysis:
The GBP/USD pair recently tested the resistance level at 1.2715, marking its highest point in 2025. Following this peak, profit-taking led to a pullback towards the support level of 1.2559. Currently, the pair is stabilizing around 1.2580. Technical indicators suggest that maintaining support above 1.2600 could pave the way for bulls to target resistance levels at 1.2685 and 1.2760. Conversely, a decline below the 1.2420 support may signal a potential bearish shift.
Fundamental Factors:
• Geopolitical Developments: European leaders have agreed to develop a Ukraine peace plan to present to the U.S., boosting market sentiment. This development has led to a rally in European shares and an appreciation of both the euro and the pound against the dollar.
• Trade Policies: The U.S. administration's imposition of tariffs on imports from Canada, Mexico, and China has heightened global economic concerns. However, the UK has managed to avoid these tariffs, bolstering the pound's resilience against the dollar.
• Economic Indicators: The U.S. ISM Manufacturing PMI dropped to 50.3, indicating a slowdown in manufacturing activity. This decline has contributed to a weakening dollar, providing support for the GBP/USD pair.