GBP/USD Outlook: Bullish Structure Targets 1.3670 Ahead of BoE

GBP/USD continues to establish a bullish structure within its broader annual range following a liquidity sweep below the June 24 low. Technical price action shows a initial push toward the imbalance level 29, followed by a corrective pullback to test the bullish imbalance at level 31. With a new bullish imbalance now established at level 32 below current spot prices, the market maintains a constructive backdrop for further gains.

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A temporary pullback into the imbalance 32 support zone remains a plausible scenario before buyers resume the upward drive. If the bullish impulse continues, the primary long-term technical objective for GBP/USD remains the upper boundary of the trading range near 1.3670. Technical indicators suggest maintaining existing long exposures while watching for further buying opportunities on dips.

Central Bank Policy Divergence

Fundamental drivers continue to lean heavily in favor of the British pound due to monetary policy expectations. Consensus forecasts indicate the Bank of England may tighten policy up to three times, whereas the Federal Reserve is expected to execute only one additional rate increase over the coming year, as reflected in recent FOMC minutes and dot plot projections.

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The US dollar appears to have fully priced in its recent positive news flow, leaving upside momentum constrained. While safe-haven flows tied to international geopolitical developments provided temporary support to the dollar in previous months, the broader fundamental outlook points to renewed weakness for the greenback unless further geopolitical escalation occurs.

Upcoming Economic Catalysts

Volatility is expected to pick up significantly over the coming sessions as major economic events unfold. Key events on the radar include the UK Services PMI, alongside US ADP Employment Change, ISM Services PMI, and the results of the US congressional elections.

Market focus will firmly shift toward the Bank of England’s rate decision on Thursday, followed by crucial US Nonfarm Payrolls and unemployment figures on Friday. These events will serve as decisive catalysts for the next directional leg in GBP/USD.

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