Clinging to gains, struggling near 1.3100

• GBP/USD is below 1.3100 with price action suggesting buyer caution amid Fed rate cut uncertainty.
• A break above 1.3100 could target the YTD high of 1.3130 with further gains towards 1.3200.
• A close below 1.3100 for the next day may trigger a pullback, possibly testing the 1.3010 level and the August 13 peak at 1.2872.

Sterling clung to minimal gains against the greenback on Thursday, even as economic data from the UK showed trading activity remained solid. At the time of writing, GBP/USD is trading at 1.3097, up 0.10%.

GBP/USD Price: Technical Insights

After breaking above 1.3100, GBP/USD pulled back somewhat but remains below the latter. Price action over the past two days suggests buyers remain reluctant to open new bets that sterling will extend its gains amid uncertainty over Fed rate cuts.

If GBP/USD climbs past 1.3100 and breaks the year-to-date (YTD) high of 1.3130, expect a challenge to 1.3200.

On the other hand, if the pair closes below 1.3100 for the second consecutive day, it could pave the way for a pullback and threatens to challenge the August 20 low of 1.3010. If broken, the next area of ​​demand would be the August 13 high of 1.2872.

GBP/USD Price Action – Daily Chart