GBP/USD Price Forecast: Strengthens above 1.3550, upside bias intact while holding above 100-day SMA

The GBP/USD currency pair remained in positive territory around 1.3550 during early European trading on Wednesday, maintaining an upside bias while holding above the 100-day Simple Moving Average. UK Chancellor John Healey introduced measures to stimulate economic growth and attract private investment to the UK. In response, the British Pound strengthened against the US Dollar.

Chancellor Healey announced plans to grant city regions increased powers to draw private investment, as part of Prime Minister Andy Burnham's efforts to devolve power from central government. Healey also pledged fiscal discipline and aimed to reduce regulatory costs by 25% by the next election in 2029. The Bank of England (BoE) is projected to keep interest rates at 3.75% throughout the year and possibly until mid-2027, according to a Reuters poll.

BoE Governor Andrew Bailey emphasized the need to dispel the notion that interest rate hikes are inevitable, rather than a certainty based on economic and geopolitical factors. Analysts at UOB Group noted that GBP/USD was confined to a narrow range at the end of the previous week, with the Pound trading between 1.3482 and 1.3550 on Friday and closing at 1.3518, a negligible 0.05% decrease.

Despite the price not shifting in either direction, analysts expected GBP to trade within a range of 1.3490 to 1.3540. While UOB still perceives no significant upward momentum, they believe the bias for GBP is currently to the upside, potentially reaching 1.3565, though they do not anticipate encountering resistance at 1.3600. On the downside, a breach of 1.3520 (minor support at 1.3530) would signal a fading upside bias.

From a broader outlook, UOB reaffirms that there is little to add to their medium-term assessment, with GBP expected to trade between 1.3480 and 1.3600 in the next one to three weeks. In the daily chart, GBP/USD exhibits a mild bullish bias, as it remains above the 100-day Simple Moving Average and the lower Bollinger Band, indicating underlying demand during price dips.

However, the pair is now slightly below the Bollinger mid-line, acting as immediate resistance, while the Relative Strength Index (RSI) hovers around 54, suggesting steady but not overextended bullish momentum. On the upside, a daily close above the Bollinger middle band at 1.3560 would open the path to the upper band resistance near 1.3660.

Moving to the downside, initial support can be found at the lower Bollinger Band around 1.3465, followed by stronger structural support from the 100-day SMA at 1.3445, where buyers are likely to defend the overall positive trend.