GBPUSD Forecast and News


GBP/USD clings to recovery gains above 1.2150

GBP/USD gained traction and climbed above 1.2150 during the European trading hours. The modest US Dollar weakness provides a boost to the pair as the market focus shifts to third-quarter Unit Labor Costs data from the United States.

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Technical Overview

GBP/USD broke below the ascending regression channel coming from November 10 and extended its decline toward 1.2100. Buyers didn't have a difficult time defending that level and helped the pair advance to the 1.2150 area during the European trading hours.

Once GBP/USD returns with the ascending channel above 1.2200, additional gains toward 1.2250 (mid-point of the regression channel, 20-period SMA) and 1.2300 (psychological level) could be witnessed.

On the downside, 1.2100 (Fibonacci 23.6% retracement of the latest downtrend) aligns as intra-day support ahead of 1.2030 (100-period Simple Moving Average (SMA) on the four-hour chart) and 1.2000 (psychological level). 

It's worth noting that the 200-day SMA is currently located at 1.2130. A daily close below that level could be seen as a bearish development.


Fundamental Overview

GBP/USD has gone into a consolidation phase at around 1.2150 mid-week after having registered modest losses on Monday and Tuesday. In case the pair rises above 1.2200 and starts using that level as support, additional buyers could come into play and open the door for another leg higher.

The risk-averse market atmosphere helped the US Dollar outperform its rivals on Tuesday and caused GBP/USD to continue to push lower. Early Wednesday, US stock index futures are little changed on the day and the UK's FTSE 100 Index is moving sideways near Tuesday's closing level, pointing to a neutral market mood.

China announced new easing steps on Wednesday. Asymptomatic and mildly-symptomatic positive coronavirus cases will be allowed to quarantine at home and mass PCR testing, outside hospitals, using homes and schools, will be abandoned. This development, however, failed to provide a boost to risk mood as the data from China earlier in the day showed that the trade surplus declined at a faster pace than expected in November.

The US economic docket will feature the Unit Labor Costs data for the third quarter, which is forecast to decline to 3.2% from 3.5% in the second quarter. A weaker-than-expected print is likely to hurt the US Dollar with the immediate reaction and vice versa.

Nevertheless, market participants will keep a close eye on risk perception and unless there is a noticeable recovery in Wall Street's main indexes, GBP/USD could have a hard time gathering bullish momentum.



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: Pound Sterling recaptures 200-DMA. What’s next? Premium

GBP/USD: Pound Sterling recaptures 200-DMA. What’s next?

GBP/USD briefly recaptured 1.2300, hitting its highest since June. China’s reopening optimism and dovish Powell weigh on USD. GBP/USD sees more room to the upside after reclaiming the critical 200-Daily Moving Average.

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Editors' picks

EUR/USD extends rebound to 1.0500 amid US Dollar weakness

EUR/USD extends rebound to 1.0500 amid US Dollar weakness

EUR/USD preserves its recovery momentum and trades near 1.0500 in the European session. Despite the risk-averse market atmosphere, the US Dollar is struggling to find demand ahead of mid-tier data releases, helping the pair hold in positive territory.

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GBP/USD clings to recovery gains above 1.2150

GBP/USD clings to recovery gains above 1.2150

GBP/USD gained traction and climbed above 1.2150 during the European trading hours. The modest US Dollar weakness provides a boost to the pair as the market focus shifts to third-quarter Unit Labor Costs data from the United States.

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USD/JPY holds gains around 137.50 as yields retreat

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USD/JPY is consolidating gains around 137.50, as US Treasury yields lose their recovery momentum amid a cautious mood. The dovish remarks from BoJ's Nakamura helped the pair's advance earlier in the day, as the central bank divergence theme continues to play out. 

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Gold price struggles to gain traction, holds above $1,770

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Gold price is having a difficult time gathering bullish momentum and continuing to fluctuate in a tight range slightly above $1,770. The benchmark 10-year US Treasury bond yield holds steady above 3.5% ahead of US data, not allowing XAU/USD to find direction.

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WTI: Bears take a breather on the way to $73.20

WTI: Bears take a breather on the way to $73.20

WTI crude oil bears await more clues as they pause around $74.80, the lowest level in a week, during Wednesday’s sluggish Asian session. In doing so, the commodity price pauses the three-day downtrend. The black gold’s sustained U-turn from the 21-DMA and bearish MACD signals keep the sellers hopeful.

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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 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.

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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.