Key resistance battles 1.3210 on the road to recovery

• GBP/USD is in a gradual recovery mode as the US dollar recovers from the downside.
• Focus now turns to Q2 US GDP data for further trading impetus in GBP/USD.
• Sterling looks bullish against the US dollar on the four-hour chart.

GBP/USD is taking a step back towards the 29-month high set on Tuesday at 1.3266. The pair is being helped by a sell-off seen in the US dollar, even as it dominates risk-off flows following disappointing guidance shared by US AI titan Nvidia.

Divergent monetary policy outlooks between the US Federal Reserve (Fed) and the Bank of England (BoE) also remain in favor of the GBP/USD uptrend.

However, further upside for the pair remains at the mercy of the upcoming Q2 US Gross Domestic Product (GDP) estimate and acceptance above the 21 simple moving average (SMA) on the four-hour chart.

The 21-day SMA lines up at 1.3210, where it is now swinging. A recapture of the latter is required on a four-hour candlestick close basis to take over the psychological level of 1.3250.

New buyers are likely to emerge above this level, calling for a test of the two-year high of 1.3266 en route to the round figure of 1.3300.

Conversely, failure to get a strong position above the 21-SMA will see sellers jump back into play, pulling GBP/USD back towards the 50-SMA at 1.3120.

The Relative Resistance Index (RSI), however, is pointing north near 60, suggesting that the recovery may extend.

GBP/USD: Daily Chart