GBP/USD sets up for bullish breakout after reversal pattern completion
GBP/USD has completed a bullish reversal pattern at 1.2650, setting up for a potential breakout above 1.2800 resistance. The pair gained 0.5% to 1.2745 as sterling found support from improving UK economic sentiment and dollar weakness. Technical analysis reveals a completed inverse head-and-shoulders pattern on the 4-hour chart, with neckline resistance at 1.2800. The 50-day moving average at 1.2720 now acts as dynamic support, reinforcing the bullish structure. UK data continues to surprise to the upside, with services PMI holding above 53.0, supporting BOE hawks who favor maintaining current rates. Immediate targets include 1.2800 (pattern neckline) and 1.2850 (December high), while support levels sit at 1.2720 and 1.2650. A successful breakout above 1.2800 could accelerate gains toward 1.2900-1.2950, especially if upcoming UK inflation data exceeds expectations.
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