GBP/USD Forecast: Dollar bulls taking over

Valeria Bednarik FXStreet

GBP/USD Current price: 1.390

UK encouraging data and soaring oil prices provided support to the pound.
Soaring US Treasury yields after Powell’s speech sent the dollar skyrocketing.
GBP/USD struggling around 1.3900 and at risk of falling further.

The British Pound was among the best performers against the greenback, surging above the 1.4000 level for the first time this week. UK data was encouraging, as the February Markit Construction PMI jumped to 53.3, better than anticipated. However, an unexpected boost came from soaring oil prices, which reached one-year highs following headlines indicating that the OPEC+ is reportedly close to agreeing to leave output unchanged in April.

However, US Federal Reserve chief Jerome Powell gave a boost to the dollar, cooling hopes for a soon-to-come rate hike, despite soaring yields. The GBP/USD pair retreated sharply from the mentioned high, losing the 1.3900 mark in the American afternoon. Friday will be a light day in terms of data for the UK, as the country will only publish February Halifax House Prices.

GBP/USD short-term technical outlook

The GBP/USD pair trades in the 1.3900 price zone, with a neutral-to-bearish stance in the near-term. The 4-hour chart shows that the pair spent the day hovering around its 20 and 100 SMAs, both lacking directional strength. The pair is now speeding down below them, favoring a bearish extension. The Momentum indicator is piercing its 100 level, while the RSI hovers around 42, indicating increasing selling interest. A strong support level is 1.3860, where the pair bottomed this week.

Support levels: 1.3860 1.3820 1.3770

Resistance levels: 1.3950 1.3990 1.4030

View Live Chart for the GBP/USD

Premium

You have reached your limit of 3 free articles for this month.

Start your subscription and get access to all our original articles.

Subscribe to Premium Sign In

Author

Valeria Bednarik

FXStreet

Valeria Bednarik was born and lives in Buenos Aires, Argentina. Her passion for math and numbers pushed her into studying economics in her younger years.

EUR/USD: US Dollar to remain pressured until uncertainty fog dissipates

Unimpressive European Central Bank left monetary policy unchanged for the fifth consecutive meeting. The United States first-tier employment and inflation data is scheduled for the second week of February. EUR/USD battles to remain afloat above 1.1800, sellers moving to the sidelines.

GBP/USD softens to near 1.3600 as BoE hints further rate cuts

The GBP/USD pair loses ground to near 1.3610 during the early Asian session on Monday. The Pound Sterling softens against the Greenback amid growing expectations of the Bank of England’s interest-rate cut. Traders will take more cues from the Fedspeak later on Monday.

Gold holds gains near $5,000 as China's gold buying drives demand

Gold price clings to the latest uptick near $5,000 in Asian trading on Monday. The precious metal holds its recovery amid a weaker US Dollar and rising demand from the Chinese central bank. The delayed release of the US employment report for January will be in the spotlight later this week.

Bitcoin Weekly Forecast: The worst may be behind us

Bitcoin price recovers slightly, trading at $65,000 at the time of writing on Friday, after reaching a low of $60,000 during the early Asian trading session. The Crypto King remained under pressure so far this week, posting three consecutive weeks of losses exceeding 30%.

Weekly column: Saturn-Neptune and the end of the Dollar’s 15-year bull cycle

Tariffs are not only inflationary for a nation but also risk undermining the trust and credibility that go hand in hand with the responsibility of being the leading nation in the free world and controlling the world’s reserve currency.

XRP rally extends as modest ETF inflows support recovery

Ripple is accelerating its recovery, trading above $1.36 at the time of writing on Friday, as investors adjust their positions following a turbulent week in the broader crypto market. The remittance token is up over 21% from its intraday low of $1.12.