Chart: Is GBP/USD Ready to Extend Its Trend?

The US dollar shed its core against “riskier” peers such as the British pound following a US data release.

Will the momentum help extend GBP/USD’s months-long uptrend?

Let’s take a closer look at the 4-hour chart:

GBP/USD 4 Hour Forex Chart from TradingView

In case you missed it, the pullback in initial weekly US jobless claims released yesterday helped calm investors who were shouting “RECESSION!” on the streets.

A sign that we may be seeing an economic “cooling” rather than a “recession” helped boost risk-on currencies such as the British pound against the US dollar.

Remember that directional biases and market price volatility conditions are usually driven by fundamentals. If you haven’t done your homework on the US dollar and the British pound yet, then it’s time to check the economic calendar and keep up with the daily fundamental news.

GBP/USD, which was consolidating near the psychological level of 1.2700, saw an upward breakout that took it to the current level of 1.2750.

Are we looking at the beginning of a trend extension?

A few more bullish candlesticks could take GBP/USD to the 1.2800 Pivot Point levels or the mid-channel resistance area of ​​1.2850.

If the upside is supported by fundamental catalysts, we may even see GBP/USD retest previous areas of interest such as the R1 (1.2890) Pivot Point level or the large psychological handle of 1.3000.

On the other hand, a bearish turn could keep GBP/USD close to its multi-week lows. Watch out for bearish candlesticks that could take Cable back to 1.2700 support.

If GBP/USD’s decline leads to sustained trading below 1.2700, GBP/USD could see a bearish breakout that could pull the pair towards the S2 (1.2617) Pivot Point line and a potential inflection point.