GBP/USD targets 1.2800 as sterling momentum builds on USD weakness

GBP/USD advanced 0.4% to 1.2745 during Wednesday's session, extending its three-day rally as sterling capitalized on broad dollar weakness and positive UK economic momentum. The pair has gained over 150 pips since Monday's low, with technical indicators suggesting further upside potential toward the 1.2800 psychological level. The move higher was supported by better-than-expected UK services PMI data at 53.8, indicating continued expansion in the dominant sector. Meanwhile, the dollar remained under pressure following the Fed's dovish pause, with markets pricing in a 65% probability of rate cuts by September. Technical analysis shows strong support at 1.2700, coinciding with the 50-day moving average, while resistance lies at 1.2780 (January high). A sustained break above 1.2800 could open the path toward 1.2850, making GBP/USD an attractive long position for momentum traders.