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The British pound enjoys a constructive technical setup against the dollar.
The pound to dollar exchange rate (GBP/USD) rises to 1.3417 at the time of writing Monday, putting it near last week's ceiling.
The pair did test these levels on Tuesday, Wednesday and Thursday but was ultimately unable to make them stick, suggesting we're looking at some decent offers around here.
However, with momentum still positive, we think we can see that resistance fading in the coming days, allowing for a couple of daily closes above here, and we are forecasting a move to 1.3450.
Interestingly, we saw the 21-day exponential moving average (EMA) cross above the 55-day last week, which technical connoisseurs will tell you is a bullish development.
The implication is that we can expect the uptrend - in place since November 04 - extend higher.
Indeed, a cursory look at the daily chart shows that when the lines do cross, the subsequent trend is enduring, lasting a couple of months.
If so, then GBP/USD is well poised to rise back to 1.36-1.37 in the first quarter of next year.
"For GBPUSD, we think the dollar leg will be in the driver’s seat still. We see the USD weakening into early 2026, so the pair should continue to rally toward 1.36, at which point we expect a consolidation," says UBS in its recent year-ahead FX market assessment.