GBP/USD still well bid, still focused on 1.3200

The Greenback's current flattish stance lends extra support to GBP/USD, pushing the pair back to around the 1.3200 level as it reaches multi-day highs amid improved risk sentiment on Monday.

Technical Overview

The Relative Strength Index (RSI) indicator on the 4-hour chart rises toward 80, reflecting overbought conditions for GBP/USD.

GBP/USD could face immediate resistance at 1.3200 (static level) ahead of 1.3270 (static level) and 1.3300 (round level). On the downside, first support could be spotted at 1.3150 (static level) before 1.3100 (round level, static level) and 1.3040 (static level).

After rising nearly 1% on Friday and ending the previous week with a 1.5% gain, GBP/USD preserves its bullish momentum on Monday and trades above 1.3150. The pair's near-term technical outlook points to overbought conditions but investors could refrain from betting on a deep correction, given the broad-based selling pressure surrounding the US Dollar (USD).

The USD Index, which tracks the USD's valuation against a basket of six major currencies, lost 3% last week as the deepening US-China trade conflict fed into fears over an economic downturn in the US.

Late Friday, US President Donald Trump's administration granted some technology imports, including smartphones, computers, laptops and disc drives, exemptions from the steep 125% additional tariffs imposed on China. Trump clarified over the weekend that these products will still face the 20% existing tariffs, which were imposed initially because of the fentanyl crisis in the US. Meanwhile, US Commerce Secretary Howard Lutnick said that technology imports, alongside semiconductors, will face separate new levies within the next two months.

This development helped the USD find a foothold at the beginning of the week but its positive impact on the currency remained short-lived.

In the meantime, US stock index futures decisively higher on Monday, with Nasdaq Futures rising nearly 2% on the day.

In the absence of high-impact data releases, the risk mood could continue to drive GBP/USD's action. A bullish action in Wall Street after the opening bell could help the pair hold its ground. On Tuesday, the UK's Office for National Statistics will publish the employment report for February.