GBP/USD builds momentum for bullish reversal at key support zone

GBP/USD is consolidating around 1.2720, showing signs of potential bullish reversal after testing critical support levels. The pair has found buying interest near the 1.2700 psychological level, which aligns with the 50-day moving average, suggesting a possible pivot point for upward momentum. Sterling's resilience comes despite ongoing concerns about UK economic growth, with traders positioning ahead of upcoming UK inflation data expected next week. Technical indicators show oversold conditions on the daily RSI, supporting the case for a bounce. Immediate resistance lies at 1.2780, followed by the 1.2820 zone where the 200-day moving average converges. A sustained break above 1.2780 could trigger further gains toward 1.2850. However, failure to hold above 1.2700 support may expose the pair to deeper declines toward 1.2650. Traders are closely monitoring US dollar strength and any shifts in Bank of England rate expectations.