GBPUSD Forecast and News


GBP/USD retreats modestly after testing 1.2600

GBP/USD has edged slightly lower after having tested 1.2600 in the European session. With the dollar facing heavy selling pressure in the risk-positive market environment, however, the pair clings to strong daily gains ahead of BOE Governor Bailey's speech.

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Technical Overview

GBP/USD is closing in on the key 1.2600 level, where the Fibonacci 550% retracement of the downtrend that started on April 21 is located. The Relative Strength Index (RSI) indicator on the four-hour chart is sitting slightly above 70, suggesting that the pair could make a technical correction if it fails to break above that resistance at the first attempt.

In case 1.2600 is confirmed as support, the next bullish targets could be seen at 1.2650 (200-period SMA) and 1.2700 (psychological level, Fibonacci 61.8% retracement).

On the downside, 1.2550 (static level) aligns as interim support ahead of 1.2500 (psychological level, Fibonacci 38.2% retracement). A daily close above the latter could be seen as a significant bearish development and force buyers to book their profits and move to the sidelines. 


Fundamental Overview

GBP/USD has managed to build on last week's impressive gains and reached its highest level in more than two weeks above 1.2580. The pair faces the next resistance at 1.2600 and the bullish pressure could pick up in case this level turns into support.

The positive shift witnessed in risk sentiment at the start of the week is not allowing the greenback to find demand providing a boost to GBP/USD. The US Dollar Index, which lost more than 1% last week, is already down 0.75% on the day, reflecting the broad-based dollar weakness.

US President Joe Biden reiterated earlier in the day that they were considering reducing tariffs on China and noted that a recession in the US was "not inevitable." On top of these comments, investors continue to move away from safe-haven assets amid heightened optimism about China easing coronavirus-related restrictions. As of writing, US stock index futures were up between 0.8% and 1%, suggesting that GBP/USD is likely to preserve its bullish momentum in the second half of the day.

In the meantime, UK Foreign Secretary Liz Truss doesn't budge on their intentions to rewrite the Northern Ireland Protocol despite the Biden administration's warning that it could endanger a potential free trade deal with the US. Nevertheless, the dollar's market valuation should remain the primary driver of the pair's action at least in the near term.

In the second half of the day, the Chicago Fed National Activity Index for April will be featured in the US economic docket. Unless this data causes the market mood to sour, the greenback should stay on the back foot.



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: Will the recovery sustain above 21 DMA? Premium

GBP/USD: Will the recovery sustain above 21 DMA?

GBP/USD registered the first weekly gain in five weeks. Bulls were finally rescued, as GBP/USD stalled its four-week downtrend and rebounded firmly from two-year lows of 1.2155 reached a week ago.

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Editors' picks

EUR/USD clings to strong daily gains, stays below 1.0700

EUR/USD clings to strong daily gains, stays below 1.0700

EUR/USD has gone into a consolidation phase after having climbed to its highest level in nearly a month at 1.0687 in the European session. ECB President Lagarde's hawkish comments and the broad-based selling pressure surrounding the dollar fueled the pair's rally at the beginning of the week.

EUR/USD News

GBP/USD retreats modestly after testing 1.2600

GBP/USD retreats modestly after testing 1.2600

GBP/USD has edged slightly lower after having tested 1.2600 in the European session. With the dollar facing heavy selling pressure in the risk-positive market environment, however, the pair clings to strong daily gains ahead of BOE Governor Bailey's speech.

GBP/USD News

USD/JPY recovers a major part of its intraday losses, down little around 127.70 region

USD/JPY recovers a major part of its intraday losses, down little around 127.70 region

USD/JPY attracted some dip-buying on Monday and was supported by a combination of factors. The risk-on mood undermined the JPY and acted as a tailwind amid a pickup in the US bond yields. The prevalent USD selling bias held back bulls from placing aggressive bets and capped the upside.

USD/JPY News

Gold climbs to two-week high at $1,865 amid weaker USD

Gold climbs to two-week high at $1,865 amid weaker USD

Gold capitalizes on the improving market mood and the weakening dollar on Monday, trading at its highest level in two weeks above $1,860. The benchmark 10-year US Treasury bond yield is up more than 1%, limiting XAU/USD's upside for the time being.

Gold News

WTI crosses weekly resistance with eyes on $111.30

WTI crosses weekly resistance with eyes on $111.30

WTI crude oil remains on the front foot for the third consecutive day, edging high around $110.35 during early Monday morning in Europe. The black gold extends the previous day’s upside break of the 50-HMA to rise past the one-week-old descending trend line. The firmer RSI (14) line, not overbought, also backs the latest breakouts and keeps WTI buyers 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.