GBPUSD top-down analysis


Weekly Analysis

- GBPUSD has been range bound between 1.1800 and 1.2500 since November 2022 (green parallel lines).
- Late April into May saw cable attempt to breakout (red rectangle). However, this was unsuccessful.
- Nevertheless, cable remains near the upper boundary of the trading range and above the black 30-week EMA.
- The 30-week EMA is heading up.
- The weekly RSI also remains on the bullish side of 50 (blue rectangle), which denotes an underlying bullish momentum.

Daily Analysis

- Cable has moved out of its bearish channel, between the lower blue and red bands, and into its neutral channel between the blue bands.
- This connotes relative strength.
- Its daily RSI is looking to move above 50 (black ellipse). If successful it will be regarded as a bullish development.
- If it crosses above, the longer the RSI can maintain above 50, the greater the probability of higher prices ahead.

2-Year Note Analysis


  • 2-year notes serve as a good proxy for monetary policy.
  • The spread between the UK's 2-year gilt and US 2-year yield is moving in an upward sloping channel (green parallel lines).
  • The spread's RSI is above 50 and bullish (blue rectangle).
  • This suggests a relative hawkishness for the Bank of England over the Federal Reserve.
  • The UK's headline inflation rate is higher at 8.7% (compared to the US's 4.9%), so the relative hawkishness has a basis.
  • The spread's direction should be supportive of GBPUSD.


  • GBPUSD is above its 30-week EMA and the EMA is bullishly pointing upwards.
  • Cable's weekly RSI suggests bullish momentum.
  • The daily GBPUSD is showing relative strength.
  • The 2-year notes' spread is supportive of GBPUSD.

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Russell Shor

Senior Market Specialist

Russell Shor joined FXCM in October 2017 as a Senior Market Specialist. He is a certified FMVA® and has an Honours Degree in Economics from the University of South Africa. Russell is a full member of the Society of Technical Analysts in the United Kingdom. With over 20 years of financial markets experience, his analysis is of a high standard and quality.

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