It is currently trading at a key moment, determined by a combination of macroeconomic factors and technical structure. On the one hand, the US dollar remains supported by better-than-expected inflation data. On the other hand, market attention is focused on the meeting between Donald Trump and Xi Jinping in Beijing, which could become an important catalyst for the pair in the short term.
From a fundamental perspective, the latest US releases suggest that inflationary pressures remain persistent. This has led markets to reassess expectations around Federal Reserve policy, keeping the dollar supported in the near term. At the same time, the Trump-Xi summit remains a wild card. Any constructive outcomes on trade or regional diplomacy could improve risk sentiment and limit further USD strength. On the contrary, the lack of progress may keep the safe haven demand for the dollar intact.
Technical analysis
Technically, the weekly chart still maintains a broader bullish structure, and the price continues to form higher highs and higher lows. Currently, the pair is trading within an ascending channel, with the upper boundary lining up near a weekly imbalance zone around 1.3400. Additionally, an internal imbalance around 1.3338 remains unresolved, making both areas key levels to watch.
On the daily chart, the structure offers clearer confirmation, showing a recent change in market structure that reinforces the broader bullish bias. A daily imbalance also lies within the same region as the weekly zone, creating an area of strong confluence. As long as the price remains above the key support, the bullish movement towards these imbalance zones will remain valid.
Meanwhile, on the 4-hour chart, the price previously formed a wedge pattern before breaking lower, indicating short-term bearish pressure. This suggests that the pair may extend its correction before deciding the next direction. Measuring the recent low-to-high move with Fibonacci places the 0.618 retracement around 1.3347, a technically significant area. This zone gains additional weight as it aligns with the Fibonacci golden ratio, the weekly imbalance, the daily imbalance, and a previous resistance that can now act as support.
Conclusion
Overall, the current GBPUSD pullback still appears to be a healthy correction within a broader bullish structure, rather than a complete trend reversal. Inflation data continues to support the dollar, but geopolitical developments and the outcome of the Trump-Xi summit could quickly change market sentiment.
He 1.3338 – 1.3400 The zone remains the key area to watch. As long as the price remains in this region and buying interest returns, the broader bullish continuation will remain in play. However, a decisive break below this zone could open the door to a deeper correction before the broader uptrend resumes.
