GBPUSD Forecast and News


GBP/USD consolidates below 1.3650 as US dollar tracks yields higher

GBP/USD is consolidating gains below 1.3650, as firmer Treasury yields fuel a rebound in the US dollar across the board. Looming UK political and Brexit uncertainties limit the pair's upside. Hotter inflation in Britain keeps the BOE rate hike expectations intact. 

Latest GBP News


Technical Overview

 

Interim resistance for GBP/USD seems to have formed at 1.3650, where the 50-period SMA on the four-hour chart is located. The pair needs to rise above that level and start using it as support to attract bulls. 1.3680 (static level) and 1.3700 (psychological level, broken ascending trendline coming from December) align as the next hurdles.

On the downside, the 100-period SMA forms dynamic support a little below 1.3600. Fibonacci 23.6% retracement level of the one-month uptrend is also reinforcing that level. If we see a four-hour candle close below that support, the next bearish target could be seen at 1.3530 (Fibonacci 38.2% retracement).


Fundamental Overview

GBP/USD has managed to stage a technical correction after pushing lower earlier in the week and seems to have gone into a consolidation phase above 1.3600. The near-term technical outlook doesn't yet point to a buildup of bullish momentum and the pair could come under renewed selling pressure if buyers fail to defend 1.3600. 

The British pound struggled to capitalize on the hot inflation data from the UK on Wednesday but gained traction ahead of the American session as retreating US Treasury bond yields caused the greenback to lose interest. This action confirms the view that the dollar's valuation remains the primary driver of the pair.

The benchmark 10-year US T-bond yield is down 1% early Thursday, forcing the US Dollar Index to stay under bearish pressure near 95.50 and allowing GBP/USD to cling to modest daily gains.

In the second half of the day, the US Department of Labor's weekly Initial Jobless Claims data and the Federal Reserve Bank of Philadelphia's Manufacturing Survey will be featured in the US economic docket. The S&P 500 Futures, which was up more than 0.5% earlier in the day, was last seen rising 0.3% on the day. In case Wall Street's main indexes continue to push lower after the opening bell, we could see the dollar regather its strength. On the other hand, GBP/USD could benefit from the risk-positive market environment if US stocks rebound in a convincing way.



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: Fired up by the Fed, focus now shifts to top-tier UK data Premium

How low can the dollar go? The greenback tumbled in response to soothing words from the Federal Reserve and falling bond yields, an indirect result of warning words from other Fed officials. The focus now shifts to the UK, with economic indicators competing with the political drama. 

Read full analysis

Big Picture

GBPUSD Bullish Themes

GBPUSD BEARISh Themes

Sponsor broker


FXS Signals

Latest GBP Analysis


Latest GBP Analysis

Editors' picks

EUR/USD retreats to 1.1350 on firmer yields, ECB Minutes eyed

EUR/USD is trading around 1.1350, paring back gains amid a rebound in the US dollar. The data published by Eurostat showed on Thursday that the annual CPI in the euro area was 5% in December, matching the market expectation and the flash estimate. Investors await ECB's December Meeting Accounts and mid-tier US data.

EUR/USD News

GBP/USD consolidates below 1.3650 as US dollar tracks yields higher

GBP/USD is consolidating gains below 1.3650, as firmer Treasury yields fuel a rebound in the US dollar across the board. Looming UK political and Brexit uncertainties limit the pair's upside. Hotter inflation in Britain keeps the BOE rate hike expectations intact. 

GBP/USD News

USD/JPY: Mildly bid above 114.00 as US T-bond yields rise

USD/JPY picks up bids to 114.38, up 0.10% intraday on fresh upside momentum during Thursday’s Asian session. The yen pair recently cheered the US Treasury yields rebound while paying a little heed to Japan trade numbers. The risk barometer pair dropped the most in a week the previous day as market sentiment improved and the US bond coupons eased from the multi-day top.

USD/JPY News

Gold keeps its sight on $1,850 bullish target

Gold price has stalled its upsurge, consolidating below two-month highs of $1,844 amid firmer yields. China’s policy easing driven risk-on mood also limits gold’s gains. Although decade-high inflation rates globally have gold bulls covered. 

Gold News

WTI rebounds above $85 despite overbought conditions

WTI (NYMEX futures) is trading close to $85.50, having staged a solid comeback from a drop to near the $84.60 region. The correction in oil prices came on the heels of a dour mood on Wall Street overnight, as rallying Treasury yields weighed on the sentiment while traders fret over the Fed rate hike outlook.

Oil News

Majors

Cryptocurrencies

Signatures


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 2022 GBPUSD forecast!

2022 GBPUSD FORECAST

In the GBPUSD Price Forecast 2022, our dedicated contributors expect a continuation of the bullish trend during the year. By the end of 2021, the average price for the pair is 1.3368. Read more details about the forecast.

From Jan 2021 to Dec 2021, the maximum level for the GBPUSD (Pound US Dollar) was 1.4213 (on 31/05/21), and the minimum, 1.3205 (on 8/12/21).

MOST INFLUENTIAL POLITICAL EVENTS IN 2022 FOR GBPUSD

Number one political event in 2022 for the pound to US dollar pair is still being Brexit. BoE's fiscal policy and covid will be key too. These clouds are set to clear at various paces, making way for rapid changes and new challenges. Although 2021 was still dedicated to minor Brexit issues and fighting covid, 2022 could be when the UK goes its own way. Losing “equivalence” would make the country less attractive to investments while maintaining the current status could cause trouble within the ruling Conservative Party. Investors prefer equivalence, but any doubts about it could weigh on sterling.


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.

BOE NEWS & ANALYSIS

ECB NEWS & ANALYSIS


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.