- GBP/USD dips after failing to breach 1.2600, now trading at 1.2497 amid climbing US Treasury bond yields.
- GBP/USD traders lean on last week’s US PMI, highlighting an ongoing economic slowdown.
- BoE’s rate hike hints echo amid inflation concerns as the market keenly awaits US CPI and UK employment figures.
GBP/USD slumps in the North American session after reaching a fresh five-week high at 1.2599 amidst a light economic calendar, which would gain interest since Tuesday. Rising US Treasury bond yields and some US Dollar (USD) strength keep the Sterling (GBP) under downward pressure following the GBP/USD failure to crack 1.2600. At the time of writing, the GBP/USD is trading at 1.2513.
Sterling struggles against strengthening USD and climbing US Treasury yields as the market awaits US and UK economic indicators.
Wall Street continues to trade in a positive direction. At the same time US Treasury bond yields climb, as the 10-year US T-note yields 3.774%, three basis points (bps) up from its opening yield. Consequently, the DXY is printing modest gains of 0.15% at 103.706.
Given the lack of economic data revealed on Monday, GBP/USD traders lean onto the last week’s US data. The ISM revealed its Services PMI, which expanded but is dangerously edging towards the 50 lines, seen as an expansionary/recessionary level, suggesting the economy continues to deteriorate. That, alongside the jump in unemployment claims for the week ending June 2, justified the US Federal Reserve (Fed) stance to pause rate increases.
Aside from this, a parade of Bank of England (BoE) policymakers crossed newswires, led by Jonathan Haskel, who said the BoE “may need to raise rates more than once, from the current 4.5% level to control inflation.
Echoing some of his comments, Catherine Mann said that inflation expectations remain high, but the latest drop was important to shift her stance from a 50 to a 25 bps hike in the latest meeting. She said service inflation and wage price increases are a concern “for achieving the 2% CPI target.” Mann added, “Monetary policy is not good at fine-tuning, should focus on inflation.”
Upcoming events
On Tuesday, the US economic docket will feature May’s Consumer Price Index (CPI), the NFIB Business Optimism Index, followed by Wednesday’s Fed decision. On the UK front, employment figures will be featured on Tuesday, ahead of growth figures on Wednesday.
GBP/USD Price Analysis: Technical outlook
From a technical perspective, the GBP/USD is upward biased, trending well above the Exponential Moving Averages (EMAs) on the daily chart. Still, the pullback could put at risk support at the 20-day EMA at 1.2466. If GBP/USD falls below 1.2500, that could put the latter in the sellers’ eyesight, followed by dynamic support at the 50-day EMA at 1.2426. A break below will expose the 1.2400 figure. Conversely, the GBP/USD first resistance would be the 1.2600 mark, followed by the year-to-date (YTD) high of 1.2680.
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers. The author will not be held responsible for information that is found at the end of links posted on this page.
If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.
FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.
The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.
Recommended content
Editors’ Picks
Gold gives away some gains, slips back to $2,980
Gold retraced from its earlier all-time highs above the key $3,000 mark on Friday, finding a footing around $2,980 per troy ounce. Profit-taking, rising US yields, and a shift to a risk-on environment seem to be putting the brakes on further gains for the metal.
EUR/USD remains firm and near the 1.0900 barrier
EUR/USD is finding its footing and trading comfortably in positive territory as the week wraps up, shaking off two consecutive daily pullbacks and setting its sights back on the pivotal 1.0900 mark—and beyond.
GBP/USD remains depressed, treads water in the low-1.2900s
GBP/USD is holding steady in consolidation territory after Friday’s opening bell on Wall Street, hovering in the low-1.2900 range. This resilience comes despite disappointing UK data and persistent selling pressure on the USD.
Crypto Today: BNB, OKB, BGB tokens rally as BTC, Shiba Inu and Chainlink lead market rebound
Cryptocurrencies sector rose by 0.13% in early European trading on Friday, adding $352 million in aggregate valuation. With BNB, OKB and BGB attracting demand amid intense market volatility, the exchange-based native tokens sector added $1.9 billion.
Week ahead – Central banks in focus amid trade war turmoil
Fed decides on policy amid recession fears. Yen traders lock gaze on BoJ for hike signals. SNB seen cutting interest rates by another 25bps. BoE to stand pat after February’s dovish cut.
The Best brokers to trade EUR/USD
SPONSORED Discover the top brokers for trading EUR/USD in 2025. Our list features brokers with competitive spreads, fast execution, and powerful platforms. Whether you're a beginner or an expert, find the right partner to navigate the dynamic Forex market.