GBP/USD Breaches Three-Month High: Technical Indicators Show Overextended Momentum

Rally Drives Cable Toward 1.3550 and Beyond

GBP/USD extended its winning streak during Asian trading on Tuesday, breaking through the 1.3560 level and establishing a fresh three-month peak at 1.3562. The pair’s sustained climb reflects strong underlying momentum, supported by favorable technical positioning.

Technical Structure Remains Supportive Despite Overextended Conditions

The daily timeframe reveals an encouraging picture for bullish traders. The 14-day Relative Strength Index currently stands at 69.29, approaching but not yet reaching overbought territory. More importantly, GBP/USD maintains its position above both the nine-day and 50-day Exponential Moving Averages, with the shorter-term EMA continuing to trade above its medium-term counterpart—a classic confirmation of upward momentum.

However, the overextended nature of the current rally warrants caution. When technical indicators stretch this far, consolidation or pullback often precedes the next leg higher. Should RSI venture deeper into overbought conditions above 70, traders may see reduced buying enthusiasm in the near term.

Targeting the Next Resistance Level

Should momentum persist through these overextended readings, GBP/USD could advance toward the six-month high of 1.3726. A break above that level would open the door to 1.3788—marking the highest print since October 2021. Yet the pair’s current overextended positioning suggests this advance may require a period of consolidation.

Support Levels Define Downside Protection

Immediate support materializes at the nine-day EMA around 1.3496, followed by the crucial 50-day EMA at 1.3375. Should GBP/USD slip beneath the medium-term average, sellers could accelerate a move toward the eight-month low near 1.3010.

The technical backdrop remains constructive, but the overextended conditions reflect a market where consolidation could emerge as a healthy reset before resuming the uptrend.