The U.S. dollar gave up pips against “riskier” counterparts just like the British pound following a U.S. data release.

Will the momentum help extend GBP/USD’s months-long uptrend?

We’re taking a better take a look at the 4-hour chart:

GBP/USD 4-hour Forex Chart by TradingView

In case you missed it, the pullback within the weekly U.S. initial jobless claims released yesterday helped calm investors who were shouting “RECESSION!” within the streets.

An indication that we might even see an economic “cooldown” relatively than a “recession” helped bump up risk-related currencies just like the British pound higher against the U.S. dollar.

Keep in mind that directional biases and volatility conditions in market price are typically driven by fundamentals. Should you haven’t yet done your homework on the U.S. dollar and the British pound, then it’s time to examine out the economic calendar and stay updated on each day fundamental news

GBP/USD, which was consolidating near the 1.2700 psychological handle, saw an upside breakout that took it to its current 1.2750 levels.

Are we looking firstly of a trend extension?

A couple of more bullish candlesticks could take GBP/USD to the 1.2800 Pivot Point levels or the 1.2850 mid-channel resistance area.

If the upswing is supported by fundamental catalysts, we may even see GBP/USD retest previous areas of interest just like the R1 (1.2890) Pivot Point level or the large 1.3000 psychological handle.

Then again, a bearish turn could keep GBP/USD near its multi-week lows. Look out for bearish candlesticks which will take Cable back to the 1.2700 support.

If GBP/USD dipping lower results in sustained trading below 1.2700, GBP/USD could see a bearish trend breakout which will drag the pair to the S2 (1.2617) Pivot Point line and potential inflection point.