GBP/USD rally stalls near 1.2900 as trade war fears weigh on traders
- GBP/USD trades at 1.2885, down 0.06%, after failing to sustain momentum above 1.2900.
- US labor market shows resilience, with jobless claims lower than expected at 221K.
- BoE remains cautious on rate cuts while the UK construction sector contracts to May 2020 levels.
- Traders eye US Nonfarm Payrolls data, expected to rise by 160K in February.
The rally in the Pound Sterling (GBP) stalled after sustaining three straight days of gains. It remains firmly below 1.2900 after hitting a year-to-date (YTD) peak of 1.2923. At the time of writing, the GBP/USD is trading at 1.2885 and registers minuscule losses of 0.06%.
Sterling holds near YTD peak but struggles for further gains
The market mood remains negative amid a trade war spurred by the United States (US), which imposed tariffs on imports from Canada, Mexico and China. Even though three of the largest US automakers experienced a one-month delay in tariffs on automobile imports from Mexico and Canada, investors are flocking toward safe-haven assets.
The US Department of Labor revealed that the labor market remains in good shape after releasing the Initial Jobless Claims for the week ending March 1. Claims rose by 221K, below estimates of 235K and last week’s 242K.
On Wednesday, the Federal Reserve (Fed) revealed in its Beige Book that economic activity rose slightly, employment nudged higher and prices increased. However, US President Donald Trump's trade policies keep businesses and households uncertain.
Other data showed the US trade deficits widened in January as companies front-loaded ahead of tariffs.
Across the pond, Bank of England (BoE) officials stated they would be very careful when easing policy, as they remain concerned about a possible reacceleration of inflation. In the meantime, S&P Global Construction PMI contracted in February, hitting its weakest level since May 2020.
Ahead this week, GBP/USD traders are eyeing the release of US Nonfarm Payrolls for February, which are expected to rise by 160K, up from 143K in January.
GBP/USD Price Forecast: Technical outlook
Technically speaking, the GBP/USD pair should continue to aim higher after clearing the 200-day Simple Moving Average (SMA) at 1.2786 and surpassing the latest cycle high at 1.2811, the December 6 high. If the pair closes on a daily basis above 1.2900, a move towards 1.3000 is on the cards.
Otherwise, sellers could push the exchange rate to 1.2811, the latest resistance-turned-support, before challenging 1.2800.
British Pound PRICE Today
The table below shows the percentage change of British Pound (GBP) against listed major currencies today. British Pound was the strongest against the US Dollar.
| USD | EUR | GBP | JPY | CAD | AUD | NZD | CHF | |
|---|---|---|---|---|---|---|---|---|
| USD | -0.35% | 0.10% | -0.64% | -0.41% | -0.17% | -0.28% | -0.62% | |
| EUR | 0.35% | 0.46% | -0.22% | -0.06% | 0.19% | 0.07% | -0.27% | |
| GBP | -0.10% | -0.46% | -0.67% | -0.51% | -0.26% | -0.37% | -0.69% | |
| JPY | 0.64% | 0.22% | 0.67% | 0.14% | 0.40% | 0.25% | -0.04% | |
| CAD | 0.41% | 0.06% | 0.51% | -0.14% | 0.26% | 0.13% | -0.19% | |
| AUD | 0.17% | -0.19% | 0.26% | -0.40% | -0.26% | -0.12% | -0.44% | |
| NZD | 0.28% | -0.07% | 0.37% | -0.25% | -0.13% | 0.12% | -0.31% | |
| CHF | 0.62% | 0.27% | 0.69% | 0.04% | 0.19% | 0.44% | 0.31% |
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 British Pound from the left column and move along the horizontal line to the US Dollar, the percentage change displayed in the box will represent GBP (base)/USD (quote).
Author
Christian Borjon Valencia
FXStreet
Christian Borjon began his career as a retail trader in 2010, mainly focused on technical analysis and strategies around it. He started as a swing trader, as he used to work in another industry unrelated to the financial markets.
