The GBP/USD currency pair is currently testing its 100-day moving average at 1.33489. It dropped below this level last week with strong momentum, although previous attempts to stay under this line were brief. The 100-day moving average is important for gauging market sentiment. When prices are above this level, it often signals a bullish trend. Sellers want to defend this point, which could push the price down again.

Swing Area Technicals

Just above the 100-day moving average, there is a swing area from 1.3360 to 1.3378. This aligns with the declining 100-bar moving average on the 4-hour chart. For buyers, staying above this range is essential to strengthen their potential for a sustained upward move. Buyers have some support from last week’s low, which matches the low from May 12, and the 38.2% retracement level at 1.13426 from the 2025 trading range. This forms a solid technical base for the recent price bounce. The key focus remains on the 100-day moving average to see which way the trend will go. Whether buyers succeed or sellers regain control will likely influence a further drop toward the 38.2% retracement at 1.13426. As of today, August 6, 2025, the GBP/USD is at a crucial point right at its 100-day moving average of 1.3349. For traders, this is a key level to watch in the upcoming weeks. The next move will probably set the trend for the rest of the summer. If buyers can push the price above this level, especially clearing resistance up to 1.3378, it would indicate a bullish signal. This might be a good moment to consider buying call options, as it would show that the bounce from the May 12 low has real strength. A sustained break could lead to a more significant upward movement. Current Economic Factors However, if sellers defend this level and the price falls again, it would suggest that the recent bounce was a temporary correction. This would signal a good opportunity to consider short positions or buying put options. A failure here would shift focus back to the 38.2% retracement level, which acted as a support last week. This technical test comes as we consider recent economic news that seems to favor a stronger dollar. Last Friday’s US jobs report on August 1, 2025, was strong, showing the addition of 215,000 jobs, reinforcing the Federal Reserve’s firm approach to inflation. This dollar strength gives sellers a reason to be active now. On the other hand, the pound is dealing with challenges from a cautious Bank of England. The latest UK inflation data from late July 2025, which showed inflation stable at 3.1%, did not give the central bank a strong enough reason to signal more rate hikes. This uncertainty makes it tough for buyers to gain control. We remember the sharp market swings of 2023 when central bank policies caused significant volatility at key technical levels like this one. Therefore, the wise strategy now is to wait for a confirmed breakout in either direction before committing to a larger position. Upcoming economic reports, such as UK growth figures or US inflation data, will likely provide the push to resolve this standoff. Create your live VT Markets account and start trading now.

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