GBP/USD is pulling back after reaching a recent high near 1.3676, with the pair trading around 1.3590 on August 27, as traders reassess the US dollar outlook ahead of Federal Reserve Chair Kevin Warsh’s Jackson Hole speech.
The retreat follows July US inflation data showing headline PCE at 3.7% year over year and core PCE at 3.3%. Headline PCE was slightly above the 3.6% consensus, while core PCE matched expectations. The data kept expectations for a potentially tighter Fed rate path in focus and helped support the US dollar.
Markets are now turning to Warsh’s Jackson Hole keynote on Friday, August 28. His first major speech at the symposium could provide important clues about how he views persistent inflation, financial conditions and the Fed’s policy outlook, although the extent of any near-term policy guidance remains uncertain.
Technical Analysis
The daily chart shows that the broader bullish structure remains intact, but GBP/USD is undergoing a pullback after failing to break above 1.3676. The first key support is 1.3559, corresponding to the 23.6% Fibonacci retracement. A break below this level would increase the risk of a deeper correction toward 1.3487, the 38.2% retracement, followed by 1.3429 at the 50% retracement. Further downside could bring 1.3371–1.3351 into focus.
The rising trendline remains part of the broader bullish structure, although it sits below the immediate Fibonacci support. On the upside, 1.3676 remains the key resistance, with a decisive daily close above this level strengthening the case for further upside. Momentum remains constructive, with RSI around 59.8 and MACD still positive, although both indicate that momentum has cooled from the recent rally.
Overall, the chart points to a bullish trend undergoing a near-term correction rather than a confirmed bearish reversal. GBP/USD is now positioned between 1.3559 support and 1.3676 resistance. Holding above 1.3559 would keep the broader bullish structure intact, while a break below it could expose 1.3487 and 1.3429.
GBP/USD is approaching a key technical and fundamental decision point. A break below 1.3559 could signal a deeper correction, while a move back above 1.3676 would strengthen the bullish case.
Friday’s Jackson Hole speech adds significant event risk: a more hawkish message from Warsh could support USD and increase downside pressure on GBP/USD, while a less hawkish tone could give the pair room to recover. With markets already reassessing the Fed’s rate outlook after sticky US inflation data, volatility around these technical levels could increase.
