GBP/USD: Focus on stocks

Risk aversion could hurt GBP and vice versa.
Charts favor further upside in Sterling.

Omkar Godbole FXStreet Contributor

GBP/USD jumped to 1.4218 last week - the highest level since Feb. 2 on the back of a brexit transitional agreement and strong UK data.

However, cable's jets were cooled by fears of US-China trade war and the resulting risk aversion in the stock markets. The spot ticked higher in Asia and was last seen trading at 1.4164 as the S&P 500 futures jumped 0.5 percent on reports the US and China are working to avert a full-blown trade war.

Focus on stocks

The relief rally in the stocks will likely gather pace if both nations soften their stance on trade. In such a scenario, the GBP/USD pair could revisit and may possibly break above the last week's high of 1.4218. Meanwhile, risk aversion could yield a pullback to 10-day moving average located at 1.4035. It is worth noting that British Pound still ranks last on the list of the anti-risk currencies, courtesy of UK's current account deficit.

Technical bias remains bullish

A sequence of higher highs and lower highs, upward sloping (biased bullish) 5-day MA, 10-day MA and the bullish RSI (above 50.00 and trending) indicates scope for a rally to 1.4278 (Feb. 2 high). A close higher would allow a sustained rally to 1.4345 (recent high). On the downside, breach of support at 1.4107 (5-day MA) could yield a pullback to 1.4036 (10-day MA) and 1.40 (psychological support).

	TREND INDEX	OB/OS INDEX	VOLATILY INDEX
15M		Overbought	Low
1H		Neutral	Shrinking
4H	Bullish	Neutral	Low
1D	Bullish	Neutral	Expanding
1W	Bullish	Neutral	Expanding
Updated Mar 26, 03:00 GMT

Author

Omkar Godbole

FXStreet Contributor

Omkar Godbole, editor and analyst, joined FXStreet after four years as a research analyst at several Indian brokerage companies.

GBP/USD slips back below 1.3200

GBP/USD remains well on the defensive, sliding to the sub-1.3200 area once again on Tuesday. Cable’s decline comes as investors assess the political uncertainty in the UK, coupled with softer-than-expected UK PMI data and the better tone in the Greenback.

EUR/USD breaks below 1.1400 to hit fresh 2026 lows

EUR/USD comes under fresh and strong selling pressure on Tuesday, slipping below 1.1400 to its weakest level since June 2025. Mixed PMIs readings from Germany and the Eurozone offered little support to the single currency, while a risk-off tone across markets and stronger-than-expected US data boosted demand for the US Dollar.

Gold drops to multi-day lows, focus is now on $4,000

Gold rapidly reverses Monday's bounce and is trading sharply lower on Tuesday. The yellow metal, however, manages well to keep business above the $4,100 mark per troy ounce despite a firmer US Dollar and expectations that the Fed will keep rates higher for longer.

MiCA regulations could be the next bullish catalyst for crypto – Georg Harer, co-CEO at Bybit EU

The cryptocurrency market is losing momentum and liquidity due to the lack of a bullish catalyst. In an exclusive interview with FXStreet, Georg Harer, co-CEO at Bybit EU, says that the Markets in Crypto-Assets (MiCA) regulations could inject liquidity into the crypto market from traditional fund houses.

"Rearranging the deckchairs on the Titanic": UK's fiscal crisis outlasts another Prime Minister

Keir Starmer's resignation as the UK Prime Minister comes ten years after the Brexit referendum vote, a coincidence that financial markets have been quick to note. The British Pound trades around 1.3220 against the US Dollar on Thursday.

Regime change: Inside Kevin Warsh's first move to make the Fed unreadable on purpose

The rate did not move. That was the least interesting thing about Kevin Warsh's first meeting in charge of the Fed. The FOMC held its benchmark at 3.50%-3.75% for the fourth straight meeting, exactly as priced, and then the new chair used his first press conference to dismantle the machinery the market has leaned on for a decade.