GBP/USD Price Forecast: Expects more downfall below 1.3250
- The Pound Sterling underperforms against the US Dollar amid the risk-off market mood.
- The war in the Middle East has improved the safe-haven demand of the US Dollar.
- Investors await the US CPI and the UK GDP data.
The Pound Sterling is down 0.5% to near 1.3350 against the US Dollar (USD) during the European trading session on Monday. The GBP/USD pair tumbles as the US Dollar (USD) outperforms its peers, with demand for safe-haven assets remaining firm, amid war in the Middle East between the United States (US), Israel, and Iran.
US Dollar Price Today
The table below shows the percentage change of US Dollar (USD) against listed major currencies today. US Dollar was the strongest against the Euro.
| USD | EUR | GBP | JPY | CAD | AUD | NZD | CHF | |
|---|---|---|---|---|---|---|---|---|
| USD | 0.63% | 0.50% | 0.41% | -0.19% | 0.41% | 0.26% | 0.26% | |
| EUR | -0.63% | -0.13% | -0.18% | -0.81% | -0.22% | -0.36% | -0.36% | |
| GBP | -0.50% | 0.13% | -0.08% | -0.68% | -0.09% | -0.24% | -0.24% | |
| JPY | -0.41% | 0.18% | 0.08% | -0.60% | -0.01% | -0.16% | -0.16% | |
| CAD | 0.19% | 0.81% | 0.68% | 0.60% | 0.60% | 0.45% | 0.45% | |
| AUD | -0.41% | 0.22% | 0.09% | 0.00% | -0.60% | -0.14% | -0.15% | |
| NZD | -0.26% | 0.36% | 0.24% | 0.16% | -0.45% | 0.14% | 0.00% | |
| CHF | -0.26% | 0.36% | 0.24% | 0.16% | -0.45% | 0.15% | -0.01% |
The heat map shows percentage changes of major currencies against each other. The base currency is picked from the left column, while the quote currency is picked from the top row. For example, if you pick the US Dollar from the left column and move along the horizontal line to the Japanese Yen, the percentage change displayed in the box will represent USD (base)/JPY (quote).
As of writing, the US Dollar Index (DXY), which tracks the Greenback’s value against six major currencies, trades 0.5% higher to near 99.35.
The outlook of the US Dollar remains firm as the war in the Middle East could escalate further, following the announcement of Mojtaba Khamenei as Iran’s new Supreme Leader. US President Donald Trump said last week that the choice for Iran’s new supreme leader would be “unacceptable”, and he intends to pick a new one for them.
On the macroeconomic front, investors await the US Consumer Price Index (CPI) data for February, which will be released on Wednesday. In the United Kingdom (UK), investors will focus on the monthly Gross Domestic Product (GDP) and the factory data for January, which is scheduled on Friday.
GBP/USD technical analysis
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GBP/USD trades sharply lower at around 1.3350 as of writing. The near-term bias is bearish as spot holds below the 20-day exponential moving average, which is around 1.3466 and capping rebounds.
The 14-day Relative Strength Index (RSI) slides to near 35.00, confirming a downside momentum after failing to sustain earlier recoveries, keeping sellers in control while the pair trades beneath the recent cluster of short-term averages.
Initial resistance emerges at the 20-day EMA, followed by the 38.2% Fibonacci retracement at 1.3539. On the downside, immediate support sits near the March 3 low of 1.3254, and a clear break below this area would expose the next bearish objective toward 1.3190, the 78.6% retracement, as the broader corrective phase deepens.
(The technical analysis of this story was written with the help of an AI tool.)
Pound Sterling FAQs
The Pound Sterling (GBP) is the oldest currency in the world (886 AD) and the official currency of the United Kingdom. It is the fourth most traded unit for foreign exchange (FX) in the world, accounting for 12% of all transactions, averaging $630 billion a day, according to 2022 data. Its key trading pairs are GBP/USD, also known as ‘Cable’, which accounts for 11% of FX, GBP/JPY, or the ‘Dragon’ as it is known by traders (3%), and EUR/GBP (2%). The Pound Sterling is issued by the Bank of England (BoE).
The single most important factor influencing the value of the Pound Sterling is monetary policy decided by the Bank of England. The BoE bases its decisions on whether it has achieved its primary goal of “price stability” – a steady inflation rate of around 2%. Its primary tool for achieving this is the adjustment of interest rates. When inflation is too high, the BoE will try to rein it in by raising interest rates, making it more expensive for people and businesses to access credit. This is generally positive for GBP, as higher interest rates make the UK a more attractive place for global investors to park their money. When inflation falls too low it is a sign economic growth is slowing. In this scenario, the BoE will consider lowering interest rates to cheapen credit so businesses will borrow more to invest in growth-generating projects.
Data releases gauge the health of the economy and can impact the value of the Pound Sterling. Indicators such as GDP, Manufacturing and Services PMIs, and employment can all influence the direction of the GBP. A strong economy is good for Sterling. Not only does it attract more foreign investment but it may encourage the BoE to put up interest rates, which will directly strengthen GBP. Otherwise, if economic data is weak, the Pound Sterling is likely to fall.
Another significant data release for the Pound Sterling is the Trade Balance. This indicator measures the difference between what a country earns from its exports and what it spends on imports over a given period. If a country produces highly sought-after exports, its currency will benefit purely from the extra demand created from foreign buyers seeking to purchase these goods. Therefore, a positive net Trade Balance strengthens a currency and vice versa for a negative balance.
Author
Sagar Dua
FXStreet
Sagar Dua is associated with the financial markets from his college days. Along with pursuing post-graduation in Commerce in 2014, he started his markets training with chart analysis.
