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The GBP/USD pair opened with a bearish gap on Monday, ending a five-day rally that pushed the pair to its highest level since late February. The pair briefly tested the 1.3485 level before retreating, indicating a lack of follow-through buying despite the pound's initial rebound. The dollar's strength, driven by ongoing speculation about Federal Reserve rate hikes, has limited the pound's upside potential. Traders are now watching whether the 1.3400 psychological level will hold as support or if the pair will test lower levels. The recent price action suggests a potential consolidation phase, with key support at 1.3350 and resistance at 1.3500. The broader implications for forex markets hinge on the Fed's next policy moves and the UK's economic data releases in the coming weeks. For now, the GBP/USD remains in a mixed technical setup, with momentum indicators showing divergence between price and volume, signaling possible volatility ahead.
