GBP/USD Price Forecast: The bullish tone remains in play near 1.3300

GBP/USD attracts some buyers to near 1.3290 in Monday’s early European session.
The positive view of the pair prevails above the key 100-day EMA with the bullish RSI indicator.
The first upside barrier is seen at 1.3445; the initial support level is located at 1.3234.

Lallalit Srijandorn FXStreet

The GBP/USD pair gains traction to around 1.3290 during the early European session on Monday. The US Dollar (USD) softens against the Pound Sterling (GBP) amid heightened economic uncertainty in the wake of US President Donald Trump's erratic trade policies.

According to the daily chart, the bullish outlook of GBP/USD remains intact, characterized by the price holding above the key 100-day Exponential Moving Average (EMA). The upward momentum is supported by the 14-day Relative Strength Index (RSI), which stands above the midline near 55.60, suggesting the path of least resistance is to the upside.

The immediate resistance level emerges at 1.3445, the high of April 28. Extended gains could see a rally to 1.3580, the upper boundary of the Bollinger Band. Further north, the next hurdle is located at 1.3642, the high of February 18, 2022.

On the flip side, the low of April 23 at 1.3234 acts as an initial support level for a major pair. The key contention level to watch is the 1.3000 psychological level. The additional downside filter is seen at 1.2905, the 100-day EMA, followed by 1.2870, the lower limit of the Bollinger Band.

GBP/USD daily chart

Pound Sterling FAQs

What is the Pound Sterling?

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).

How do the decisions of the Bank of England impact on the Pound Sterling?

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.

How does economic data influence the value of the Pound?

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.

How does the Trade Balance impact the Pound?

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.

BRANDED CONTENT

Choosing a broker that aligns with your trading needs can significantly impact performance. Our list of the best regulated brokers highlights the best options for seamless and cost-effective trading.

Author

Lallalit Srijandorn

FXStreet

Lallalit Srijandorn is a Parisian at heart. She has lived in France since 2019 and now becomes a digital entrepreneur based in Paris and Bangkok.

GBP/USD off highs, back to 1.3620

GBP/USD remains slightly on the defensive at the end of the week, receding to the low 1.3600s after hitting fresh tops past 1.3670 earlier in the day. Cable’s correction comes after two daily gains in a row and amid a tepid advance in the Greenback, while poor UK data also accompany the downside.

EUR/USD treads water below 1.1700

EUR/USD now trades with modest losses around 1.1670 following another unsuccessful atempt to advance past 1.1700 the figure in a convincing fashion. The pair’s decline follows a maginal rebound in the US Dollar as market participants continue to assess recent US data as well as developments from the US bond market.

Gold trims gains, recedes to the sub-$4,600 area

Gold rapidly leaves behind Thursday’s inconclusive price action and advances markedly on Friday, briefly surpassing the $4,600 mark per troy ounce to hit three-month peaks. Meanwhile, the precious metal’s solid performance comes despite marginal gains in the buck coupled with another day of rising US Treasury yields across the curve.

Crypto Today: Bitcoin, Ethereum, XRP bulls accelerate rally amid rising ETF inflows

The cryptocurrency market remains bullish on Friday, led by Bitcoin’s surge above $77,000. Altcoins, including Ethereum and Ripple, mirror BTC’s positive outlook, trading near $2,400 and $1.35, respectively.

Week ahead – Fed’s Jackson Hole and Nvidia earnings to dictate markets

Kevin Warsh to make his Jackson Hole debut amid confusing messaging. But a major hawkish surprise unlikely after bond market intervention. Nvidia earnings to also determine market direction as stock rally cools.

$20 billion offered, $2 billion taken: Why Treasury doubled its buyback cap

The US Treasury moved off its own calendar on Wednesday, and that is the part worth sitting with. At 12:32 GMT, the department said it would at least double the size of liquidity support buyback operations in the 10-year to 20-year and 20-year to 30-year sectors, lifting the maximum from $2 billion per operation to at least $4 billion, effective September 9 and running to November 4.