Sterling Extends Gains to 11-Month High, CPI and G7 Meeting in Focus

 Key Takeaways:

*Pound Sterling gained ahead of the UK CPI reading. 

*Eyes on the G7 meeting that could alter the Pound Sterling price direction. 

The Pound Sterling has extended its rally, rising to its strongest level against G7 peers since last July, supported by robust UK economic data and positive momentum from recent U.S.-UK trade discussions. The rally underscores growing market confidence in the UK’s economic outlook.

Investors will be closely watching today’s UK CPI release, with expectations pointing to a slight uptick from the previous print. A reading in line with or above forecasts could further strengthen the Sterling and potentially push it toward new highs.

Meanwhile, forex markets are bracing for heightened volatility ahead of this week’s G7 summit in Canada. The meeting’s agenda, which includes U.S. tariff policy, could significantly sway G7 currency performance depending on the geopolitical tone and trade-related outcomes.

Technical Analysis

GBPUSD, H4

The British pound extended gains against the U.S. dollar after confirming an inverse head-and-shoulders formation, with the pair now approaching a key resistance level at 1.3420. A decisive break above this threshold could pave the way for GBP/USD to revisit highs not seen since 2022, reinforcing the bullish outlook.

Momentum indicators support the rally. The Relative Strength Index is trending toward overbought territory, while the MACD has crossed above the zero line and continues to edge higher, signaling growing upside momentum.

Traders will be watching closely to see if the pair can sustain its current trajectory and confirm a breakout above the critical resistance zone.

Resistance levels:1.3535, 1.3650

Support levels: 1.3290, 1.3162