GBPUSD Is Testing 1.36 — Is the Pound Ready for a New Bullish Phase?
Market analysis by Strifor analysts
The British pound is once again approaching a potentially decisive area against the U.S. dollar.
According to Strifor analysts, GBPUSD is entering an important technical and fundamental zone as the pair tests the 1.36 level after a period of recovery.
The previous interest-rate advantage of the U.S. dollar has disappeared, while expectations surrounding the Bank of England's next policy move are becoming increasingly important for sterling.
At the same time, GBPUSD has returned to the upper boundary of its broad multi-month trading range.
The key question for traders is whether the pair can finally break above this resistance and begin a new bullish phase, or whether the 1.36 area will once again trigger a rejection.
The U.S. Dollar Has Lost Its Rate Advantage
One of the most important factors behind the recent recovery in GBPUSD is the changing interest-rate differential between the United States and the United Kingdom.
With both the Federal Reserve and the Bank of England at 3.75%, the previous rate advantage of the U.S. dollar has effectively disappeared.
This has reduced one of the major fundamental supports for the dollar and created a more balanced environment for GBPUSD.
However, interest-rate parity alone does not determine the direction of a currency pair. Markets are forward-looking, meaning expectations about future monetary policy can be just as important as current rates.
Bank of England Expectations Support Sterling
Sterling is also receiving support from expectations that the Bank of England's next move could potentially be a rate hike.
At the latest Monetary Policy Committee meeting, three members voted in favor of tighter policy.
For the pound, this is an important signal. If expectations for tighter Bank of England policy continue to strengthen, sterling could receive additional support against the dollar.
However, upcoming UK inflation, employment and economic-growth data will remain crucial in determining whether these expectations are sustainable.
GBPUSD Returns to the Upper Boundary of Its Range
From a technical perspective, GBPUSD has returned to the upper boundary of a broad multi-month range:
1.315–1.36
The pair has spent a significant amount of time trading within this zone, making the current test particularly important.
The 1.36 area is now the key level to watch, according to Strifor analysts.
A sustained move above this level could indicate that the market is moving from a range-bound structure into a new bullish phase.
On the other hand, another rejection would suggest that sellers remain active around the upper boundary and that GBPUSD could continue trading within its established range.
Bullish Scenario: Breakout Above 1.36
The bullish scenario would require GBPUSD to break above 1.36 and, more importantly, maintain the breakout.
A temporary spike above resistance would not necessarily confirm a new trend.
For the bullish setup to strengthen, buyers would need to demonstrate that they can maintain control above the former range boundary.
If this happens alongside continued U.S. dollar weakness and stronger expectations for Bank of England tightening, the breakout could become a significant medium-term signal.
Bearish Scenario: Another Rejection
The alternative scenario is another rejection from 1.36.
In this case, GBPUSD could remain inside the broader 1.315–1.36 range.
A rejection would indicate that the market has once again failed to overcome the upper boundary and that the current recovery may represent another range-bound move rather than the beginning of a new trend.
For traders, the reaction to 1.36 could therefore be more important than the approach toward the level itself.
What Could Drive the Next GBPUSD Move?
Several factors will determine whether the pound can break higher.
Federal Reserve Policy
Any shift in expectations regarding U.S. monetary policy could have a significant impact on the dollar.
A more dovish Federal Reserve could reinforce dollar weakness and provide additional support for GBPUSD.
Bank of England Policy
The three MPC votes in favor of tighter policy have increased attention on the possibility of a more hawkish Bank of England stance.
If markets begin pricing in a higher probability of rate increases, sterling could receive further support.
UK Economic Data
Inflation, employment and economic-growth figures will remain critical.
Stronger-than-expected data could reinforce expectations for tighter monetary policy, while weaker data could reduce support for the pound.
U.S. Economic Data
At the same time, stronger U.S. economic figures could support the dollar and make a sustained GBPUSD breakout more difficult.
The balance between U.S. and UK economic expectations will therefore remain one of the main drivers of the pair.
Key Levels to Watch
For the current GBPUSD setup, the main technical framework is:
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1.36 — key resistance and potential breakout level
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1.315–1.36 — broader multi-month trading range
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Above 1.36 — potential confirmation of a new bullish phase
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Rejection from 1.36 — potential continuation of range-bound trading
These levels should be considered together with the fundamental backdrop rather than in isolation.
Strifor Analysts' Outlook
According to the Strifor analytical team, GBPUSD is approaching a potentially decisive point.
The disappearance of the previous U.S. interest-rate advantage, combined with expectations of potentially tighter Bank of England policy, has created a more supportive environment for sterling.
However, the technical picture remains equally important.
The 1.36 level represents the key test.
A sustained breakout could signal that GBPUSD is finally leaving its multi-month range and entering a new bullish phase.
Another rejection would instead suggest that the established range remains intact.
For traders, the next reaction around 1.36 could therefore provide one of the clearest signals for the medium-term direction of the pound.
The question is simple: will 1.36 remain a ceiling for GBPUSD, or become the starting point for the next bullish move?
This material represents the general market view of Strifor analysts and is provided for informational and educational purposes. It does not constitute investment advice or a recommendation to buy or sell any financial instrument.
