Sterling Hits $1.34 in Long Rally; $1.3430 Key Hurdle for Bulls
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The British pound extended its bullish streak into an eleventh consecutive session on Tuesday, with GBP/USD breaking above the $1.34 threshold for the first time in months. This 11-day rally—marking one of the longest uninterrupted climbs in recent years—has propelled sterling 11% higher since mid-January, driven by a confluence of factors ranging from softening U.S. dollar sentiment to cooling inflation in the UK and rising expectations for a Bank of England rate cut.
While the rally has been steep and sustained, the pair now faces a significant technical hurdle at $1.3430. This level served as the reversal point during a failed breakout in late September and now threatens to form a double-top pattern. A rejection here could trigger a wave of profit-taking and technical selling, particularly as short-term momentum indicators flirt with overbought conditions. Conversely, a decisive breakout above this resistance would likely open the door toward the $1.36 zone, with bulls eyeing a potential extension of the trend.
Beyond technicals, the macro narrative continues to favor sterling over the greenback. Dollar sentiment has deteriorated sharply amid mounting political pressure on the Federal Reserve. President Trump’s public feud with Chair Jay Powell—featuring increasingly aggressive rhetoric and calls for immediate rate cuts—is unsettling markets and eroding confidence in the independence of U.S. monetary policy. This has redirected capital flows toward perceived alternatives, including the euro, yen, gold, and, increasingly, the pound.
With the economic calendar relatively quiet on both sides of the Atlantic this week, cable may remain in a technically driven regime—unless, of course, political volatility reemerges. Trump’s digital tirades have become high-impact market events in their own right, capable of disrupting sentiment with little warning. In the absence of new macro data, traders should stay alert for unscheduled headline risk, especially as GBP/USD tests the limits of this breakout. Keep a close eye on the $1.3430 pivot; it will likely dictate short-term positioning and momentum going into month-end.
While the rally has been steep and sustained, the pair now faces a significant technical hurdle at $1.3430. This level served as the reversal point during a failed breakout in late September and now threatens to form a double-top pattern. A rejection here could trigger a wave of profit-taking and technical selling, particularly as short-term momentum indicators flirt with overbought conditions. Conversely, a decisive breakout above this resistance would likely open the door toward the $1.36 zone, with bulls eyeing a potential extension of the trend.
Beyond technicals, the macro narrative continues to favor sterling over the greenback. Dollar sentiment has deteriorated sharply amid mounting political pressure on the Federal Reserve. President Trump’s public feud with Chair Jay Powell—featuring increasingly aggressive rhetoric and calls for immediate rate cuts—is unsettling markets and eroding confidence in the independence of U.S. monetary policy. This has redirected capital flows toward perceived alternatives, including the euro, yen, gold, and, increasingly, the pound.
With the economic calendar relatively quiet on both sides of the Atlantic this week, cable may remain in a technically driven regime—unless, of course, political volatility reemerges. Trump’s digital tirades have become high-impact market events in their own right, capable of disrupting sentiment with little warning. In the absence of new macro data, traders should stay alert for unscheduled headline risk, especially as GBP/USD tests the limits of this breakout. Keep a close eye on the $1.3430 pivot; it will likely dictate short-term positioning and momentum going into month-end.