Technical Analysis:
GBP/USD continued its steady ascent, briefly touching a fresh 2025 high at 1.3587 over the weekend before consolidating slightly lower into a tight 1.3559-1.3587 range Monday amid moderate market flows. Sterling’s recent strength was modestly reinforced by news that the UK government will allocate GBP 3 billion to domestic workforce training initiatives aimed at reducing dependence on overseas labor. This strategic policy decision by the Labour government may also have subtle implications in curbing the appeal of political rivals such as Reform UK, thereby potentially enhancing political stability—an underlying positive for sterling sentiment.

From a purely technical perspective, GBP/USD retains a clearly bullish setup. The short-term trend is supported by upward-sloping 5-, 10-, and 21-day moving averages, reflecting robust positive momentum. Further bullish confirmation is provided by expanding 21-day Bollinger Bands, which typically indicate strengthening directional momentum and volatility expansion aligned with the prevailing trend. Momentum oscillators, including RSI and stochastic indicators, continue to point higher without signaling overextended conditions, suggesting additional near-term upside remains achievable. Traders targeting higher ground will closely watch the major resistance at the 2022 high of 1.3749, which if cleared decisively, would pave the way toward even higher long-term technical objectives around the 2021 peak at 1.4250.

Support on pullbacks is initially situated at Monday’s session low of 1.3510, followed by the more robust and psychologically significant base formed near 1.3420 (Friday's low). While short-term profit-taking could temporarily pressure sterling, such moves will likely be limited in scope given the constructive technical backdrop and supportive fundamental developments. In the week ahead, traders must remain attuned to significant economic releases from both Europe and the U.S., as these may dictate broader dollar direction and subsequently influence the pace and sustainability of GBP/USD’s bullish trajectory.