GBP/USD gains traction despite lingering UK economic concerns

GBP/USD has regained positive momentum, though underlying doubts about UK economic prospects continue to cap sterling's upside potential. The pair's recovery reflects temporary dollar weakness rather than fundamental pound strength, with UK 30-year gilt yields indicating ongoing fiscal concerns. Market participants remain cautious about the UK's growth trajectory amid sticky inflation and potential Bank of England policy constraints. Technical indicators suggest GBP/USD has found near-term support, but resistance levels from recent peaks remain intact. The pound faces headwinds from domestic political uncertainties and questions about the UK's fiscal sustainability. Traders are closely watching for any shifts in Bank of England rhetoric or UK economic data surprises that could alter the current dynamic. The pair's ability to sustain gains above key technical levels will be crucial for determining whether this recovery has legs or represents a temporary bounce.