GBPUSD Forecast and News
GBP/USD retreats below 1.2700 as US Dollar decline stalls
GBP/USD is falling back below 1.2700, extending its retreat from multi-month highs in European trading on Monday. The pair fails to find any inspiration from BoE Governor Bailey's hawkish comments, as the US Dollar looks to stabilize ahead of top-tier economic data and Fedspeak.
Latest GBP News
Technical Overview
The daily chart for the GBP/USD pair shows it trades around its opening level but also that it posted a higher high and a higher low, maintaining the risk skewed to the upside. At the same time, the Momentum indicator heads firmly north, well above its 100 level, while the Relative Strength Index (RSI) indicator is losing its strength at around 70. Finally, the pair develops above all its moving averages, with the 20 Simple Moving Average (SMA) maintaining its solid upward slope just below directionless 100 and 200 SMAs.
GBP/USD is overbought in the near term, but a steeper decline remains out of the picture. Technical indicators are in retreat mode after reaching extreme levels, but their downward strength is limited. At the same time, the pair develops far above a bullish 20 SMA, which keeps advancing above also bullish 100 and 200 SMAs.
Support levels: 1.2650 1.2605 1.2570
Resistance levels: 1.2690 1.2730 1.2780
Fundamental Overview
Following Tuesday's sharp US Dollar decline, the GBP/USD pair traded as high as 1.2732, its highest since late August. The Greenback collapsed following surprising dovish comments from Federal Reserve (Fed) officials, reinforcing the market's belief that the central bank is done with rate hikes.
The US Dollar found some favor early on Wednesday as investors took some profit away from the table ahead of first-tier data releases. GBP/USD trades around 1.2680 mid-European session, with United Kingdom (UK) minor figures posted earlier in the day resulting encouraging. On the one hand, October Consumer Credit unexpectedly rose by £1.289 billion, missing expectations and less than in September. On the other hand, M4 Money Supply rose 0.3% MoM in October, while Mortgage Approvals in the same month jumped to 47.38K.
Meanwhile, a continued decline in US government bond yields limits USD gains. The 10-year Treasury note currently offers 4.29%, its lowest in two months, while the 2-year note pays 4.70%, the lowest since mid-July.
The United States (US) will release the second estimate of the Q3 Gross Domestic Product (GDP), which is expected to confirm the annual pace of growth at 5%, slightly better than the previous 4.9%. Additionally, multiple Federal Reserve speakers will be on the wire, while Bank of England (BoE) Governor Andrew Bailey will deliver brief remarks at an event celebrating the 50th anniversary of the London Foreign Exchange Joint Standing Committee.
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: Bullish bias remains intact for Pound Sterling Premium
The Pound Sterling gathered further strength against the US Dollar this week, as GBP/USD renewed a two-month high just shy of the 1.2600 level. The pair remains exposed to further upside risks, in the face of a bullish technical setup on the daily chart, heading into a relatively data-light week.
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Editors' picks
EUR/USD eases below 1.1000 ahead of German inflation data
EUR/USD is trading below 1.1000, losing its upside traction in the European session on Wednesday. The pair is holding steady, as the US Dollar finds its feet despite a sell-off in the US Treasury bond yields. Traders stay cautious ahead of the German inflation and US GDP data.
GBP/USD retreats below 1.2700 as US Dollar decline stalls
GBP/USD is falling back below 1.2700, extending its retreat from multi-month highs in European trading on Monday. The pair fails to find any inspiration from BoE Governor Bailey's hawkish comments, as the US Dollar looks to stabilize ahead of top-tier economic data and Fedspeak.
Japanese Yen trims a part of intraday gains after BoJ board member Adachi's comments
The Japanese Yen strengthened to a two-and-half-month high against the US Dollar on Wednesday. Dovish Fed expectations drag the US bond yields lower and continue to weigh on the Greenback. USD/JPY bounces off daily low after BoJ's Adachi denied speculation of ending negative rates.
Gold price retreats from multi-month peak as USD stages a modest recovery ahead of US GDP
Gold price (XAU/USD) struggles to capitalize on its intraday gains to the $2,052 area and retreats from a near seven-month top touched earlier this Wednesday.
Oil soars for a second day as rumours build up towards OPEC+ meeting
WTI Oil soars higher as consensus is near within OPEC on production quotas. The US Dollar is trying to turn around recent declines after it hit a fresh three-month low. Oil to rally further ahead of OPEC+ on Thursday when more details will leak on production cuts.
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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 2023 GBPUSD forecast!
2023 GBPUSD FORECAST
In the GBPUSD Price Forecast 2023, our dedicated contributors expect a continuation of the bullish trend during the year. By the end of 2022, the average price for the pair is 1.1791. Read more details about the forecast.
From Jan 2022 to Dec 2022, the maximum level for the GBPUSD (Pound US Dollar) was 1.24183 (on 14/12/22), and the minimum, 1.0339 (on 26/09/22).
MOST INFLUENTIAL POLITICAL EVENTS IN 2023 FOR GBPUSD
It was another down year for the GBP/USD pair but the severity of the decline was intense mainly due to the monetary policy divergence between the US Federal Reserve (Fed) and Bank of England (BoE) in the first half of 2022. Meanwhile, the failure of the United Kingdom (UK) political system collaborated with the collapse of the Pound Sterling against the United States Dollar (USD) in the second half of the year.
Additionally, the British economy was badly hit by Russia’s invasion of Ukraine that took place in February last year. The West responded with harsh sanctions on Russia, as Moscow refused to stay quiet and cut the gas supplies to Europe and the United Kingdom among other restrictive measures.
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.
BOE Official Website, on Twitter and Facebook
The Federal Reserve Bank (Fed)
On the other
FED Official Website, on Twitter and Facebook
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.
Bailey on BOE'S Profile and Wikipedia
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.
Jerome Powell Fed's Profile and Wikipedia
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.