The pound has been quite resilient in recent times and if you look at the GBP/USD chart above, you can see that the pair is actually on the hunt for a eight consecutive weekly gain. While the post-Fed slump in the dollar certainly helped, the pair is actually closer to flat levels on the week now and it is a question of whether buyers can keep the break above 1.2500 from last week.
That seemed to be a strong foundation for a further push higher but buyers have been struggling somewhat this week, with the high only touching 1.2590 before slipping back to around 1.2565 at the moment.
With much of the focus being on the Fed and broader risk sentiment, the dollar side of the equation is the key driving factor of GBP/USD currently.
The greenback was softer after the Fed yesterday but if the overall risk mood remains heavy and we do continue to see strong risk aversion in markets, that could eventually lend some support to the dollar (think dollar smile theory).
As such, even if GBP/USD has the technical momentum on its side, there is more work to be done to confirm any further upside run.
The resistance from the May highs last year around 1.2660-66 will also offer up some challenge for buyers before thinking about the 100-week moving average (red line) at 1.2722.
On the flip side, a fall back below 1.2500 into the weekly close could be the start of a turnaround in the pair - especially if broader markets continue to remain jittery on the global growth outlook.
