• GBP/USD clings to modest gains above 1.2800 following Thursday's rally.
  • The near-term technical outlook points to overbought conditions.
  • US economic docket will feature February jobs report on Friday.

GBP/USD rose more than 0.5% on Thursday and closed the fifth consecutive trading day in positive territory. The pair continued to edge higher early Friday and touched its highest level since August above 1.2800. The pair's near-term technical outlook points to overbought conditions as investors gear up for the US February jobs report.

GBP/USD extended its weekly rally on Thursday as risk flows continued to dominate the financial markets. Wall Street's main indexes registered strong gains for the second consecutive day and the US Dollar Index dropped to multi-week lows below 103.00.

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.

The US Bureau of Labor Statistics will release labor market data for February. Nonfarm Payrolls (NFP) are forecast to rise by 200,000 following January's impressive 353,000 increase. In case NFP comes in stronger than forecast, investors could see this as a signal to take profit off the table, causing GBP/USD to push lower ahead of the weekend.

On the other hand, a disappointing NFP print could further weigh on the USD. Nevertheless, week-end flows could limit GBP/USD's upside, especially given the overbought conditions.

GBP/USD Technical Analysis

The Relative Strength Index (RSI) indicator on the 4-hour chart holds above 70 and GBP/USD trades well above the upper limit of the ascending regression channel coming from mid-February.

GBP/USD was last seen trading near 1.2830. In December, the pair staged a deep downward correction after meeting resistance at this level. In case GBP/USD manages to clear this hurdle this time around by confirming it as support, 1.2900 (psychological level, static level) could be seen as next resistance before 1.2940 (static level from August 2023).

On the downside, 1.2800 (psychological level, static level) could be seen as first support before 1.2780 (upper limit of the broken ascending regression channel). A 4-hour close below the latter could open the door for an extended slide toward 1.2750 (mid-point of the channel).

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


Recommended Content

Editors’ Picks

EUR/USD edges higher toward 1.1400 on renewed USD weakness

EUR/USD edges higher toward 1.1400 on renewed USD weakness

EUR/USD clings to small daily gains above 1.1350 in the American session on Monday. The cautious market mood and easing US Dollar demand help the pair stretch higher as investors gear up for this week's upcoming key macroeconomic data releases.

EUR/USD News
GBP/USD gathers bullish momentum, advances to 1.3400

GBP/USD gathers bullish momentum, advances to 1.3400

GBP/USD extends its daily climb to the 1.3400 area in the second half of the day on Monday. Renewed US Dollar weakness amid a lack of fresh developments hinting at a further de-escalation of the US-China trade conflict support the pair ahead of this week's critical data releases.

GBP/USD News
Gold rebounds above $3,300 as mood sours

Gold rebounds above $3,300 as mood sours

Following a bearish opening to the week, Gold gains traction and trades above $3,300 in the American session. Mixed headlines on the ongoing US-China trade war cause markets to remain risk-averse on Monday, allowing XAU/USD to turn north.

Gold News
XRP extends gains ahead of futures ETFs launch this week

XRP extends gains ahead of futures ETFs launch this week

XRP climbs over 3% on Monday, hovering around $2.33 at the time of writing. The rally is likely catalyzed by key market movers like XRP futures Exchange Traded Funds (ETFs) approval by the US financial regulator, the Securities and Exchange Commission (SEC), and a bullish outlook.

Read more
Week ahead: US GDP, inflation and jobs in focus amid tariff mess – BoJ meets

Week ahead: US GDP, inflation and jobs in focus amid tariff mess – BoJ meets

Barrage of US data to shed light on US economy as tariff war heats up. GDP, PCE inflation and nonfarm payrolls reports to headline the week. Bank of Japan to hold rates but may downgrade growth outlook. Eurozone and Australian CPI also on the agenda, Canadians go to the polls.

Read more
The Best brokers to trade EUR/USD

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.

Read More

Majors

Cryptocurrencies

Signatures

Best Brokers of 2025