- 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 consolidates near two-week high, looks to US NFP for fresh impetus
AUD/USD holds steady around the 0.6335 area during the Asian session on Friday as traders now await the US NFP report. Bets that the Fed will cut rates further amid concerns over failing US economic growth keep the USD depressed near a multi-month low and act as a tailwind for spot prices, though tariff jitters warrant caution for bulls.
USD/JPY seems vulnerable amid divergent Fed-BoJ expectations; US NFP awaited
USD/JPY languishes near its lowest level since October touched on Thursday amid a bearish USD, led by bets that the Fed could cut rates multiple times in 2025 amid slowing US economic growth. Moreover, the hawkish sentiment surrounding the BoJ's policy outlook underpins the JPY and validates the negative bias for the pair.
Gold price remains depressed ahead of US NFP; trade jitters to limit losses
Gold price trades with negative bias for the second straight day, though a combination of factors continues to act as a tailwind ahead of the crucial US NFP report later this Friday. Rising trade tensions continue to weigh on investors' sentiment.
Crypto AI Tokens: Why FET, NEAR and RNDR could outperform BTC after White House Summit
The White House Crypto Summit is scheduled to hold on Friday. Rather than double-down on BTC, sector-wide price trends show that investors are leaning towards Crypto AI altcoins.
Make Europe great again? Germany’s fiscal shift is redefining the European investment playbook
For years, Europe has been synonymous with slow growth, fiscal austerity, and an overreliance on monetary policy to keep its economic engine running. But a major shift is now underway. Germany, long the poster child of fiscal discipline, is cracking open the purse strings, and the ripple effects could be huge.
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.