- GBP/USD stays below 1.2700 after posting small gains on Monday.
- The technical outlook suggests that the bearish bias remains intact.
- The pair is likely to stay on the back foot unless risk mood improves.
GBP/USD benefited from the selling pressure surrounding the US Dollar (USD) in the second half of the day on Monday and registered modest gains. The pair, however, finds it difficult to hold above 1.2700 and the technical outlook suggests that the bearish bias remains unchanged in the near term.
British Pound PRICE Last 7 days
The table below shows the percentage change of British Pound (GBP) against listed major currencies last 7 days. British Pound was the weakest against the Swiss Franc.
| USD | EUR | GBP | JPY | CAD | AUD | NZD | CHF | |
|---|---|---|---|---|---|---|---|---|
| USD | 0.44% | 0.37% | 0.66% | -0.06% | -0.07% | 0.38% | -0.92% | |
| EUR | -0.44% | -0.08% | 0.24% | -0.50% | -0.50% | -0.06% | -1.36% | |
| GBP | -0.37% | 0.08% | 0.30% | -0.43% | -0.45% | 0.00% | -1.31% | |
| JPY | -0.66% | -0.24% | -0.30% | -0.72% | -0.75% | -0.31% | -1.60% | |
| CAD | 0.06% | 0.50% | 0.43% | 0.72% | -0.01% | 0.43% | -0.88% | |
| AUD | 0.07% | 0.50% | 0.45% | 0.75% | 0.00% | 0.45% | -0.88% | |
| NZD | -0.38% | 0.06% | -0.01% | 0.31% | -0.43% | -0.45% | -1.30% | |
| CHF | 0.92% | 1.36% | 1.31% | 1.60% | 0.88% | 0.88% | 1.30% |
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 positive shift seen in risk mood caused the USD to weaken against its major rivals in the American session on Monday. The Nasdaq Composite gained more than 1% and the S&P 500 rose nearly 0.8%.
The US Census Bureau will release Retail Sales data for May on Tuesday. Investors look for an increase of 0.2%. Unless there is a significant divergence from the market expectation, the reaction to this data could remain short-lived.
Meanwhile, market participants are likely to continue to pay close attention to comments from Federal Reserve officials and to changes in risk mood.
If policymakers leave the door open to a rate reduction in September, the USD could struggle to find demand and help GBP/USD hold its ground. In this scenario, risk flows are likely to continue to drive the action in markets and put additional weight on the USD's shoulders. On the other hand, investors could adopt a cautious stance in case officials voice their willingness to wait until the end of the year before considering a rate cut.
In the early European session on Wednesday, the UK's Office for National Statistics will release the inflation data for May.
GBP/USD Technical Analysis
GBP/USD stays below the lower limit of the ascending regression channel and the Relative Strength Index on the 4-hour chart remains well below 50, reflecting the bearish bias. On the downside, 1.2640 (Fibonacci 38.2% retracement of the latest uptrend) aligns as key support ahead of 1.2600 (psychological level, static level) and 1.2580 (Fibonacci 50% retracement).
Resistances could be seen at 1.2700, 1.2720 (Fibonacci 23.6% retracement) and 1.2750, where the 50-period Simple Moving Average (SMA) is located.
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: Extra gains need to clear 0.6400
AUD/USD rose for the third day in a row, approaching the key 0.6400 resistance on the back of the acute pullback in the US Dollar amid mounting recession concerns and global trade war fear.
EUR/USD: Powell and the NFP will put the rally to the test
EUR/USD gathered extra steam and advanced to multi-month peaks near 1.1150, although the move fizzled out somewhat as the NA session drew to a close on Thursday.
Gold looks offered near $3,100
Prices of Gold remain on the defensive on Thursday, hovering around the $3,100 region per troy ounce and retreating from earlier all-time peaks near the $3,170 level, all against the backdrop of investors' assessment of "Liberation Day".
Interoperability protocol hyperlane reveals airdrop details
The team behind interoperability protocol Hyperlane shared their upcoming token airdrop plans happening at the end of the month. The airdrop will occur on April 22, and users can check their eligibility to receive $HYPER tokens via a portal provided by the Hyperlane Foundation by April 13, the team shared in a press release with CoinDesk.
Trump’s “Liberation Day” tariffs on the way
United States (US) President Donald Trump’s self-styled “Liberation Day” has finally arrived. After four straight failures to kick off Donald Trump’s “day one” tariffs that were supposed to be implemented when President Trump assumed office 72 days ago, Trump’s team is slated to finally unveil a sweeping, lopsided package of “reciprocal” tariffs.
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.