GBPUSD will rally towards 1.35500 amid further dollar weakening

The GBPUSD currency pair grew steadily in the previous four trading sessions due to the weakening of the US dollar against the pound sterling, overcoming the psychological level of 1.34000. Today, May 23, the pair is trading at $1.345 per pound sterling and testing the local resistance level of 1.34450. The current economic situation around the once reliable reserve currency and further decline in confidence in the US dollar will drive the pair quotes to the new psychological level of 1.36000.

The daily Relative Strength Index (RSI) on the timeframe increased to 62 from 38 in 4 trading days, signaling the GBPUSD upward trend. The 4-hour RSI has a value of 62 and is also in the bullish zone above the 50 line for the fifth trading session, supporting the buying bias for the currency pair.

The Moving Average Convergence Divergence (MACD) indicator on the daily timeframe is steadily in the positive zone, gaining momentum for GBPUSD growth again. Its histograms are crossing the 9-day simple moving average from bottom to top. The 4-hour MACD is also building in the positive zone and shows a slight strengthening of the bullish momentum.

The British pound has steadily strengthened against the dollar since January 2025, reflecting differences in economic conditions between the UK and the US. Several key factors are contributing to the dollar weakness against the pound and other major foreign currencies. These are the downgraded forecasts of growth in the US economy and deteriorating market sentiment. Investor’s caution amid speculation that the Federal Reserve will keep interest rates stable for a long time is also playing its role. Another serious factor is the declining confidence in the dollar as a reliable investment asset, as well as the downgrade of the US sovereign debt rating by Moody's agency. Moreover, Donald Trump's tax bill threatens to seriously increase the country's already huge national debt.

Trading strategy option: buy at the current price with Take Profit at 1,35500 and Stop Loss at 1,33500.