The GBP/USD currency pair climbed to a new 2024 high of 1.3054 during Tuesday's session as traders capitalized on the continued weakness in the U.S. dollar ahead of the highly anticipated Jackson Hole symposium. However, despite this upward momentum, there are growing concerns among traders that the pair might be setting up for a bull trap. The critical level to watch is the prior year-to-date (YTD) high at 1.3044. Should GBP/USD fail to secure a daily close above this level, it could indicate a false breakout, signaling that the recent rally is losing steam and that a reversal could be imminent.

A potential bull trap is a significant concern for those who have been bullish on the pound. A false break, where the price moves above a key technical level but then quickly reverses, often serves as a precursor to a more substantial decline. In this context, a daily close below 1.3040 would confirm the false break, suggesting that GBP/USD might struggle to maintain its recent gains. A more bearish signal would be a daily close below the 1.30 mark, a psychological level that has acted as a formidable resistance point for the pair over the past two years. Given the dollar’s current oversold status, pursuing further upside in GBP/USD might prove to be a precarious strategy.

Compounding the risk, broader market dynamics are also turning less favorable for GBP/USD. Risk assets have begun to pull back, with the S&P 500 retreating below 5600, which could hinder further gains in cable. Investors are growing increasingly cautious as they await the Jackson Hole symposium, where Federal Reserve Chair Jerome Powell is expected to provide crucial guidance on the central bank’s monetary policy outlook. While many market participants are anticipating a dovish tone from Powell, the risk of disappointment is high. If Powell does not deliver the dovish message that traders are hoping for, it could spark a rebound in the U.S. dollar, putting additional downward pressure on GBP/USD.

From a technical perspective, the area between 1.3044 and 1.3054 now represents a critical resistance zone. For the bullish outlook to remain intact, GBP/USD would need to secure a daily close above this range. Failure to do so could trigger a corrective phase, with key support levels to monitor at the 25-hour moving average (1.2979) and the 100-hour moving average (1.2935). A breach of these support levels would likely confirm a shift in momentum, paving the way for a deeper pullback.

In conclusion, while GBP/USD has reached a new peak for 2024, the risk of a bull trap is becoming increasingly pronounced. The pair's ability to maintain a daily close above 1.3044 will be a critical determinant of whether the recent rally can be sustained or if a reversal is imminent. As the Jackson Hole symposium approaches, the broader risk environment and the implications of Powell’s speech will likely play a pivotal role in shaping the next move for GBP/USD.