GBPUSD Forecast and News


GBP/USD: Inside candle favors a pullback, 1.1000 a key hurdle

The GBP/USD pair has turned sideways after a strong rebound from a fresh multi-decade low of 1.3565 on Monday. The cable is displaying back-and-forth moves in a range of 1.0661-1.0832 and is displaying a volatility contraction phase. 

Latest GBP News


Technical Overview

As long as GBP/USD holds above 1.0790 (Fibonacci 23.6% retracement of the two-week-old downtrend), it could extend its correction toward 1.0900 (20-period SMA on the four-hour chart), 1.0970 (Fibonacci 38.2% retracement) and 1.1000 (psychological level).

On the downside, supports align at 1.0700 (psychological level, static level), 1.0600 (psychological level) and 1.0500 (static level, psychological level). 

In the meantime, the Relative Strength Index (RSI) indicator stays below 50 after having recovered above 30 late Monday, confirming the view that GBP/USD is in a technical correction stage. 


Fundamental Overview

GBP/USD has managed to pull away from the all-time low it touched at 1.0340 at the beginning of the week. The pair was last seen rising nearly 1% on the day at 1.0800 but it might need further reassurance from the Bank of England (BoE) for an extended rebound.

Following the British pound's significant depreciation, the BoE released a statement late Monday and noted that they were monitoring the developments in financial markets closely. The BoE added that they won't hesitate to raise interest rates by "as much as needed" to return inflation to the 2% target. However, the bank also said that they welcome the government’s commitment to sustainable economic growth, which was why GBP fell sharply in the first place. 

Investors are concerned that tax cuts will fuel inflation while putting the UK public finances on an unsustainable path. The UK's FTSE 100 Index trades in negative territory early Tuesday, reflecting markets' cautious stance. 

Nevertheless, futures markets are currently pricing in an 80% chance that the BoE will raise rates to 3.5% by November from 2.25%, according to Reuters. 

Later in the day, BoE Chief Economist Huw Pill will be delivering a speech. In case Pill suggests that the BoE could still go for an unscheduled rate hike to limit the GBP's losses, GBP/USD could gather further recovery momentum. 

August Durable Goods Orders and New Home Sales data from the US will be looked upon for fresh impetus in the American session. The Conference Board will release the September Consumer Confidence data as well. US stock index futures post strong gains and unless these data cause the market mood to sour in the second half of the day, risk flows could help the pair hold its ground.



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: Oversold but is selling overdone? Premium

GBP/USD: Oversold but is selling overdone?

Nothing could stop bears in the last week, as GBP/USD booked two straight weeks of decline. The Fed and the BOE decisions underscored the widening policy divergence while geopolitical tensions also played a part in the pair’s over-400-pips weekly loss. 

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 braces for fresh multi-year low around 0.9600, ECB’s Lagarde, Fed’s Powell eyed

EUR/USD braces for fresh multi-year low around 0.9600, ECB’s Lagarde, Fed’s Powell eyed

EUR/USD holds lower grounds around the yearly bottom marked on Monday, despite picking up bids to 0.9600 during Wednesday’s Asian session, as risk-aversion intensifies. Firmer US data, hawkish Fedspeak joined upbeat yields to weigh on prices.

EUR/USD News

GBP/USD: Inside candle favors a pullback, 1.1000 a key hurdle

GBP/USD: Inside candle favors a pullback, 1.1000 a key hurdle

The GBP/USD pair has turned sideways after a strong rebound from a fresh multi-decade low of 1.3565 on Monday. The cable is displaying back-and-forth moves in a range of 1.0661-1.0832 and is displaying a volatility contraction phase. 

GBP/USD News

USD/JPY: No man’s land hints at further consolidation

USD/JPY: No man’s land hints at further consolidation

The USD/JPY pair has slipped to near 144.27 in the Tokyo session after failing to sustain above the critical resistance of 144.50. The asset is continuously facing barricades above 144.50 despite multiple attempts. On a broader note, the asset is advancing sharply higher after hitting a low of 140.35.

USD/JPY News

Gold dribbles above $1,600 as inverted hammer contrasts risk-aversion

Gold dribbles above $1,600 as inverted hammer contrasts risk-aversion

Gold price struggles to find acceptance at around $1,630, despite bullish technical signals, as fears of the European energy crisis join firmer yields to propel the US dollar. Bullish candlestick can play its role if Fed’s Powell resists praising hawks.

Gold News

WTI licks its wounds near $77.00 as recession woes ebb, US macro, API inventories eyed

WTI licks its wounds near $77.00 as recession woes ebb, US macro, API inventories eyed

WTI crude oil portrays a corrective bounce amid Tuesday’s quiet Asian session, around $77.10 by the press time of the pre-European session. In addition to the lack of data/events during early Tuesday, the US dollar’s pullback and hopes of avoiding the recession seem to have favored the energy benchmark’s recovery from the lowest levels since January 2020.

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.