GBP/USD technical analysis: 5th wave extension targets identified

GBP/USD is positioned for potential upward movement as technical analysis suggests the pair may be developing a fifth Elliott Wave extension. The cable has been consolidating near the 1.2950 level, with traders eyeing a possible breakout toward 1.3050 resistance. The US Dollar Index has shown signs of topping out near 102.50, which could provide additional support for sterling strength. Technical indicators point to bullish momentum building, with the RSI holding above 50 and MACD showing positive divergence. Key support levels are identified at 1.2900 (50-day moving average) and 1.2850 (previous week's low). A successful break above 1.3000 psychological resistance could accelerate gains toward 1.3100, completing the anticipated fifth wave pattern. However, traders should monitor upcoming UK inflation data and US retail sales figures, which could influence near-term price action and validate or invalidate the current wave count.