The British pound has established a solid base above 1.2600 and technical indicators suggest the path of least resistance is higher. This week’s weekly outlook examines the key levels and catalysts that could drive GBP/USD toward the 1.28 target.
Weekly Chart Structure
GBP/USD has posted three consecutive weekly gains, a sequence that historically has a high probability of continuation in trending markets. The pair has reclaimed the 38.2% Fibonacci retracement of the 2023 high-to-low range, which now acts as support at 1.2580.
Fibonacci Targets
Projecting from the recent swing low at 1.2300, Fibonacci extension levels provide the following upside targets:
- 100% extension: 1.2720 (near-term target, already tested)
- 127.2% extension: 1.2820 (primary weekly target)
- 161.8% extension: 1.2970 (longer-term target)
Fundamental Catalysts This Week
UK CPI data on Wednesday is the key event risk for GBP this week. A reading above the 3.2% consensus could fuel expectations for a longer BoE rate hold, providing further support for the pound. Below-consensus data could trigger a retest of the 1.2600 support zone.
The trend is your friend for GBP/USD bulls. As long as price holds above 1.2600, the bullish thesis remains intact with 1.28 as the primary objective this week.