GBP/USD Potential Bullish Reversal Above 20-Day Moving Average
By Kelvin Wong | 8 May 2026
Key Takeaways
- GBP/USD remains supported despite rising US-Iran tensions.
- Traders are focused on upcoming US labor market data and consumer sentiment figures.
- Intermarket dynamics favor further upside for the British pound (GBP).
- Technical indicators suggest a potential bullish reversal is underway.
Market Context
The GBP/USD currency pair has shown resilience, trading sideways after hitting a two-month high of 1.3658 on May 1, 2026. On May 7, 2026, it experienced a slight decline of 0.2%, reaching an intraday low of 1.3723, influenced by escalating tensions between the US and Iran. Traders are particularly attentive to key US economic releases, including the April non-farm payrolls and unemployment rate data, as well as the preliminary University of Michigan consumer sentiment report for May.
Intermarket Dynamics
The UK-US implied interest rate spread has steepened significantly, indicating that the Bank of England (BoE) may adopt a more hawkish stance compared to the Federal Reserve. Interest rate futures suggest a potential hike by the BoE in July, which could further support the GBP against the USD.
Technical Analysis
From a technical perspective, GBP/USD is currently holding above the pivotal support level of 1.3530, indicating a bullish trend. The pair is trading above both the 20-day and 50-day moving averages, which supports the ongoing uptrend. The hourly RSI momentum indicator has recently exited the oversold region, suggesting strengthening upside momentum.
Resistance and Support Levels
- Resistance Levels: 1.3590, 1.3640/3665, and 1.3730
- Support Levels: 1.3490 and 1.3450
Conclusion
Overall, the combination of intermarket dynamics and technical indicators suggests a potential bullish reversal for GBP/USD. Traders should monitor upcoming economic data closely, as it may influence the short-term direction of the pair.