GBP/USD Price Forecast: Trades around 1.3450; bulls retain control above 100-hour SMA

The GBP/USD currency pair experienced a surge in trading activity on Wednesday, reaching levels not seen since mid-May and trading above the 1.3600 mark. This rally was primarily driven by the US Treasury's decision to double liquidity support buyback operations for longer-dated nominal coupon securities, which placed downward pressure on the US Dollar, thereby supporting the GBP/USD pair.

Inflation data from the UK showed annual Consumer Price Index (CPI) inflation rising to 2.9% in July, meeting market expectations, while core CPI increased by 2.6% year-on-year in July compared to the anticipated 2.5%. This data provided a positive boost to the British Pound (GBP), as higher inflation rates often strengthen the GBP.

On the technical side, the GBP/USD pair was found to be above the 200-hour Simple Moving Average (SMA), indicating a positive near-term trend. Momentum indicators, such as the Relative Strength Index (RSI) and Moving Average Convergence Divergence (MACD), also lent support to the bullish sentiment.

However, investors remained cautious, awaiting further developments surrounding the US-Iran conflict and the upcoming Nonfarm Payrolls (NFP) report. A potential break below the 1.3379 level, which acts as a support point near the 200-period SMA, could weaken the bullish bias and open the pathway to deeper losses. On the upside, bulls were looking towards the psychological 1.3500 mark as a potential resistance level.