- GBP/USD moves sideways in a tight range slightly above 1.3200.
- Improving risk mood could help the pair hold its ground.
- The US economic calendar will feature Retail Sales data for August.
GBP/USD started the week on a bullish note and registered impressive gains on Monday. The pair seems to have entered into a consolidation phase above 1.3200 in the European morning on Tuesday. Investors could refrain from taking large positions ahead of key data releases and central bank meetings.
British Pound PRICE This week
The table below shows the percentage change of British Pound (GBP) against listed major currencies this week. British Pound was the strongest against the US Dollar.
| USD | EUR | GBP | JPY | CAD | AUD | NZD | CHF | |
|---|---|---|---|---|---|---|---|---|
| USD | -0.63% | -0.79% | -0.10% | -0.11% | -0.89% | -0.77% | -0.52% | |
| EUR | 0.63% | -0.23% | 0.50% | 0.49% | -0.32% | -0.20% | 0.06% | |
| GBP | 0.79% | 0.23% | 0.63% | 0.71% | -0.10% | 0.04% | 0.30% | |
| JPY | 0.10% | -0.50% | -0.63% | -0.01% | -0.74% | -0.65% | -0.48% | |
| CAD | 0.11% | -0.49% | -0.71% | 0.00% | -0.87% | -0.66% | -0.52% | |
| AUD | 0.89% | 0.32% | 0.10% | 0.74% | 0.87% | 0.13% | 0.37% | |
| NZD | 0.77% | 0.20% | -0.04% | 0.65% | 0.66% | -0.13% | 0.26% | |
| CHF | 0.52% | -0.06% | -0.30% | 0.48% | 0.52% | -0.37% | -0.26% |
The heat map shows percentage changes of major currencies against each other. The base currency is picked from the left column, while the quote currency is picked from the top row. For example, if you pick the British Pound from the left column and move along the horizontal line to the US Dollar, the percentage change displayed in the box will represent GBP (base)/USD (quote).
The selling pressure surrounding the US Dollar (USD) fuelled a leg higher in GBP/USD on Monday. The improving risk mood amid growing optimism about a large Federal Reserve (Fed) rate reduction this Wednesday weighed heavily on the USD.
Early Tuesday, US stock index futures trade in positive territory. In case risk flows continue to dominate the financial markets in the second half of the day, GBP/USD could hold its ground.
The US economic calendar will feature Retail Sales data for August later in the day. Investors expect a monthly increase of 0.2% following the 1% growth in July. Although an upbeat reading could support the USD, it is unlikely to have a lasting impact on the currency's valuation before the Fed's policy announcements.
Early Wednesday, the UK's Office for National Statistics will publish Consumer Price Index (CPI) data for August. The Bank of England (BoE) will release the interest rate decision on Thursday.
GBP/USD Technical Analysis
The Relative Strength Index (RSI) indicator on the 4-hour chart stays near 70, suggesting that GBP/USD could turn overbought in case it continues to push higher in the short term. Nevertheless, the pair maintains its bullish bias with the 20-period Simple Moving Average (SMA) rising above slightly above the 100-period SMA.
On the downside, 1.3200 (static level) aligns as immediate support before 1.3150-1.3140 (100-period SMA, Fibonacci 38.2% retracement of the latest uptrend) and 1.3100 (static level). The first resistance could be seen at 1.3260 (end-point of the latest uptrend) before 1.3300 (static level).
Pound Sterling FAQs
The Pound Sterling (GBP) is the oldest currency in the world (886 AD) and the official currency of the United Kingdom. It is the fourth most traded unit for foreign exchange (FX) in the world, accounting for 12% of all transactions, averaging $630 billion a day, according to 2022 data. Its key trading pairs are GBP/USD, aka ‘Cable’, which accounts for 11% of FX, GBP/JPY, or the ‘Dragon’ as it is known by traders (3%), and EUR/GBP (2%). The Pound Sterling is issued by the Bank of England (BoE).
The single most important factor influencing the value of the Pound Sterling is monetary policy decided by the Bank of England. The BoE bases its decisions on whether it has achieved its primary goal of “price stability” – a steady inflation rate of around 2%. Its primary tool for achieving this is the adjustment of interest rates. When inflation is too high, the BoE will try to rein it in by raising interest rates, making it more expensive for people and businesses to access credit. This is generally positive for GBP, as higher interest rates make the UK a more attractive place for global investors to park their money. When inflation falls too low it is a sign economic growth is slowing. In this scenario, the BoE will consider lowering interest rates to cheapen credit so businesses will borrow more to invest in growth-generating projects.
Data releases gauge the health of the economy and can impact the value of the Pound Sterling. Indicators such as GDP, Manufacturing and Services PMIs, and employment can all influence the direction of the GBP. A strong economy is good for Sterling. Not only does it attract more foreign investment but it may encourage the BoE to put up interest rates, which will directly strengthen GBP. Otherwise, if economic data is weak, the Pound Sterling is likely to fall.
Another significant data release for the Pound Sterling is the Trade Balance. This indicator measures the difference between what a country earns from its exports and what it spends on imports over a given period. If a country produces highly sought-after exports, its currency will benefit purely from the extra demand created from foreign buyers seeking to purchase these goods. Therefore, a positive net Trade Balance strengthens a currency and vice versa for a negative balance.
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers. The author will not be held responsible for information that is found at the end of links posted on this page.
If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.
FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.
The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.
Recommended Content
Editors’ Picks
AUD/USD weighed down by China, tariffs
AUD/USD remained on the back foot, slipping back to the area of multi-year lows around 0.5950 on the back of mounting fears surrounding tariffs and their impact on the Chinese economy.
EUR/USD refocuses on 1.1000 amid tariffs jitters
EUR/USD reversed two daily pullbacks in a row an d managed to advance to the boundaries of the 1.1000 barrier on the back of fresh weakness hurting the US Dollar and persistent tariff fears.
Gold erases gains, back to the $2,980 zone
Gold prices now lose extra ground and slip back to the area of daily troughs near $2,980 mark per troy ounce following an unsuccesful attempt to maintain the trade above the critical $3,000 level earlier in the day.
RBNZ set for another interest rate cut amid trade tariff uncertainty
The Reserve Bank of New Zealand is on track to deliver a 25 basis point cut to the Official Cash Rate, bringing down the key policy rate from 3.75% to 3.50% following its April monetary policy meeting on Wednesday.
The Fed is looking at a hefty price level
We are still in thrall to tariffs, the faux-macro “data” driving markets. The WSJ editorial board advised other countries to take their tariffs to zero so that Trump’s “reciprocal” tariffs will have to be zero, too. Cute, but no cigar.
The Best brokers to trade EUR/USD
SPONSORED Discover the top brokers for trading EUR/USD in 2025. Our list features brokers with competitive spreads, fast execution, and powerful platforms. Whether you're a beginner or an expert, find the right partner to navigate the dynamic Forex market.