GBPUSD Forecast and News


GBP/USD extends slump sub-1.4100 as dollar rallies

GBP/USD has  extended its decline after US CPI beat estimates with 4.2% while Core CPI came out at 3%. Earlier, UK GDP beat expectations with -1.5%. Volatility is rising.

Latest GBP News


Technical Overview

Pound/dollar continues benefiting from upside momentum on the four-hour chart and trades far above the 50, 100 and 200 Simple Moving Averages. However, the Relative Strength Index (RSI) is too close to 70 – flirting with overbought conditions. That makes every upside move limited in nature.

Resistance awaits at 1,4160, which is the fresh May high. Further above, 1.42 and 1.4240 are eyed. 

Support is at 1.4110, the daily low, and then 1.4075, 1.4050 and the former triple top of 1.4010.


Fundamental Overview

Is the downside correction over? Not so fast, as GBP/USD has yet to make a convincing pullback that would allow for further gains. Markets are in a risk-off mood due to several factors. The escalating conflict between Israel and Palestinian faction Hamas is the latest factor to dampen the mood, joining the ransomware attack that has paralyzed gasoline supplies to the US northeast. 

However, the latest concern is of inflation rearing its ugly head in the US. While disappointing Nonfarm Payrolls showed the world's largest economy is cooling down, fears quickly reemerged. Are these concerns exaggerated? America publishes Consumer Price Index data for April later in the day, and core prices are set to top the 2% level. The calendar is pointing to a jump from 1.6% to 2.3% YoY. 

US Consumer Price Index April Preview: The two base effects on inflation

The greenback's recovery and the damp mood in markets are showing that unless Core CPI leaps considerably beyond estimates, the dollar could snap back in a "buy the rumor, sell the fact" response. Will the pound rise? 

Sterling has been benefiting from better than expected Gross Domestic Product figures for the first quarter in the UK. The economy shrank by only 1.5% during the first months of the year, which were dominated by the nationwide lockdown. Britain's successful vaccination campaign also supports the pound. 

While the fundamental ingredients are in for cable to resume its rally, technicals point to overstretched conditions.



SPECIAL WEEKLY GBPUSD FORECAST

Interested in weekly GBPUSD forecasts? Our experts make weekly updates forecasting the next possible moves of the pound-dollar pair. Here you can find the most recent forecast by our market experts:

GBP/USD Weekly Forecast: Can America's cooldown send sterling above 1.40? UK GDP, US consumer eyed

GBP/USD has bounced as the BOE upgraded its outlook and horrible US jobs figures. UK GDP and US consumer figures promise another busy week in cable. Early May's daily chart shows bears are gaining some ground. The FX Poll is pointing to short-term falls before and upswing later. 

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Editors' picks

EUR/USD depressed near a fresh weekly low at 1.2065

EUR/USD lost the 1.2100 mark with US inflation data, holding near its daily lows as demand for high-yielding assets receded. The greenback has room to continue rallying.

EUR/USD News

GBP/USD extends slump sub-1.4100 as dollar rallies

GBP/USD has  extended its decline after US CPI beat estimates with 4.2% while Core CPI came out at 3%. Earlier, UK GDP beat expectations with -1.5%. Volatility is rising.

GBP/USD News

USD/JPY breaks above 109.50 as US yields keep rising

Yen tumbles amid higher US yields. US Dollar gains momentum during the American session. The USD/JPY rose further and climbed to 109.56, reaching the highest level since May 3. The US dollar is having the best day in more than a month versus the yen and it heads toward the higher daily close in a month.

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XAU/USD tests $1,820 as USD capitalizes on US CPI data

The XAU/USD pair fluctuated wildly in the early American session as investors assessed the latest inflation report from the US. After spiking to a daily high of $1,843, the pair reversed its direction and dropped to $1,820 area.

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GBPUSD YEARLY FORECAST

How could GBPUSD move this year? Our experts make a GBPUSD update forecasting the possible moves of the pound-dollar pair during the whole year. Don't miss our 2021 GBPUSD forecast!

2021 GBPUSD FORECAST

In the GBPUSD Price Forecast 2021, our dedicated contributors expect a continuation of the bullish trend during the year. By the end of 2020, the average price for the pair is 1.3733. Read more details about the forecast.

From Jan 2020 to Dec 2020, the maximum level for the GBPUSD (Pound US Dollar) was 1.3587 (on 17/12/20), and the minimum, 1.1488 (on 19/03/20).

MOST INFLUENTIAL POLITICAL EVENTS IN 2021 FOR GBPUSD

Number one political event in 2021 for the pound to US dollar pair is still being Brexit. Trump, Biden's new government and covid will be key too. These clouds are set to clear at various paces, making way for rapid changes and new challenges. Economic figures will likely be the arbiter of Brexit dampening effect, the UK’s high readiness for receiving the vaccine and other factors. The changing relationship between governments and central banks will likely be in focus.


Influential Institutions & People for the GBPUSD

The Pound VS Dollar can be seriously affected by news or the decisions taken by two main central banks:

The Bank of England (BoE)

The Bank of England is the central bank of the United Kingdom. Established in 1694 and privately owned in the beginning, the Bank was nationalised in 1946 so now is completely owned by the UK government. BOE's main reason to be is to maintain monetary and financial stability in the country. Some of its other tasks are producing secure bank notes, operating asset purchase facility and keeping the inflation low and stable. The bank is overseen by the Court, named used to reffer the board of directors, and is accountable to Parliament and the public.

The Federal Reserve Bank (Fed)

On the other hand we found The Federal Reserve System (Fed) wich is the central banking system of the United States. Fed has two main targets: to keep unemployment rate to their lowest possible levels and inflation around 2%. The Federal Reserve System's structure is composed of the presidentially appointed Board of Governors, partially presidentially appointed Federal Open Market Committee (FOMC). The FOMC organizes 8 meetings in a year and reviews economic and financial conditions. Also determines the appropriate stance of monetary policy and assesses the risks to its long-run goals of price stability and sustainable economic growth.


Andrew Bailey

Andrew Bailey is Governor of the Bank of England since 16 March 2020. He was announced as the new Governor of the BoE on 20 December 2019. Bailey was born in Leicester in 1959 and graduated from Queens' College with a BA in History and a PhD from the Faculty of History, University of Cambridge in 1985. Before becoming the Governor of the BOE, Andrew worked at the Bank in a number of areas, most recently as Executive Director for Banking Services and Chief Cashier, as well as Head of the Bank's Special Resolution Unit (SRU). Previous roles include Governor's Private Secretary, and Head of the International Economic Analysis Division in Monetary Analysis.

Jerome Powell

Jerome Powell took office as chairman of the Board of Governors of the Federal Reserve System in February 2018, for a four-year term ending in February 2022. His term as a member of the Board of Governors will expire January 31, 2028. Born in Washington D.C., he received a bachelor’s degree in politics from Princeton University in 1975 and earned a law degree from Georgetown University in 1979. Powell served as an assistant secretary and as undersecretary of the Treasury under President George H.W. Bush. He also worked as a lawyer and investment banker in New York City. From 1997 through 2005, Powell was a partner at The Carlyle Group.

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About GBPUSD

The GBPUSD (or Pound Dollar) currency pair belongs to the group of 'Majors', a way to mention the most important pairs in the world. The pair is also called 'The Cable', referring to the first Transatlantic cable that was crossing the Atlantic Ocean in order to connect Great Britain with the United States of America. This term originated in the mid-19th century, which makes it one of the oldest currency pairs.

Pound Dollar represents two economies: British and American (from United States of America). The Cable is a closely watched and widely traded currency pair where the Pound is the base currency and the US Dollar is the counter currency. For that reason, all the macroeconomic data related to the US and the UK affects the price of this pair. One of the events which affected most the volatility of the pound vs. dollar was Brexit.

Related pairs

EUR/USD

The EUR/USD (or Euro Dollar) currency pair belongs to the group of 'Majors', a way to mention the most important pairs in the world. This group also includes the following currency pairs: GBP/USD, USD/JPY, AUD/USD, USD/CHF, NZD/USD and USD/CAD. The popularity of Euro Dollar is due to the fact that it gathers two main economies: the European and American (from United States of America) ones. This is a widely traded currency pair where the Euro is the base currency and the US Dollar is the counter currency. Since the EUR/USD pair consists of more than half of all the trading volume worldwide in the Forex Market, it is almost impossible for a gap to appear, let alone a consequent breakaway gap in the opposite direction.

Normally, the EUR/USD is very quiet during the Asian session because economic data that affects the fundamentals of those currencies is released in either the European or U.S. session. Once traders in Europe get to their desks a flurry of activity hits the tape as they start filling customer orders and jockey for positions. At noon activity slows down as traders step out for lunch and then picks back up again as the U.S. comes online.

USD/JPY

The USD/JPY (or US Dollar Japanese Yen) currency pair belongs to the group of 'Majors', a way to mention the most important pairs in the world. This group also includes the following currency pairs: EUR/USD, GBP/USD, AUD/USD, USD/CHF, NZD/USD and USD/CAD. Japanese Yen has a low interest rate and is normally used in carry trades. This is the reason why is one of the most trades currencies worldwide. In the USD/JPY the US Dollar is the base currency and the Japanese Yen is the counter currency. The pair represents American (from United States of America) and Japanese economies.

Trading the USD/JPY currency pair is also known as trading the "ninja" or the "gopher", although this last name is more frequently used when referred to the GBP/JPY currency pair. The US Dollar Japanese Yen usually has a positive correlation with the following two pairs: USD/CHF and USD/CAD. The nature of this correlation is due to the fact that both currency pairs also use the US Dollar as the base currency, such as USD/JPY. The value of the pair tends to be affected when the two main central banks of each country, the Bank of Japan (BoJ) and the Federal Reserve Bank (Fed), face serious interest rate differential.