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Currencies GBP/USD

Pound Sterling Climbs on Uncertainty Over US Tariffs and BoE Warnings on Economic Risk

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  • July 10, 2025
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Pound Sterling (GBP) rose against the US Dollar (USD) on Thursday, trading around 1.3600, as investor mood remained nervous with increasing uncertainty over US trade talks and fresh retaliatory tariffs that are scheduled to go into effect on August 1. Notwithstanding warnings issued by the Bank of England (BoE) regarding large economic dangers—such as geopolitical tensions, an increase in national debt, and poor business sentiment—the British currency got some respite. The US Dollar, meanwhile, lost a bit of ground as markets absorbed the Federal Reserve’s dovish tone in its June meeting minutes, which signaled possible rate cuts if tariff-induced inflation stays in check. KEY LOOKOUTS • Markets are keeping a close eye on whether the US clinches trade agreements with important partners such as China, the Eurozone, Canada, and Mexico prior to the onset of new reciprocal tariffs. •  The UK’s monthly factory output and GDP for May are awaited by investors, with GDP predicted to bounce back by 0.1% following April’s 0.3% decline. •  Warnings by the Bank of England regarding escalating geopolitical tensions, a fractured global marketplace, and rising sovereign debt will also impact investor sentiment towards the Pound. •  FOMC minutes indicate potential interest rate reductions this year, depending on the trajectory of tariff-induced inflation, which can continue to put pressure on the US Dollar. The Pound Sterling rose against the US Dollar on Thursday to trade around the 1.3600 level as market players reacted to a combination of economic and geopolitical events. Investor attention was on rising trade tensions, with the US scheduled to levy new retaliatory tariffs on 21 countries from August 1, adding volatility to worldwide markets and exerting pressure on the US Dollar. In spite of the Bank of England’s warning report flagging high economic risks like geopolitics instability, increased national debt, and muted business investment sentiment, the Pound firmed up. Dealers are also looking forward to future UK GDP and factory production figures, as the dovish policy bias from the Federal Reserve added weight to further weaken the Greenback. The Pound Sterling hovers at 1.3600 against the US Dollar in increasing uncertainty about US trade policy and impending reciprocal tariffs. Even as the Bank of England cautions rising economic threats, the GBP remains firm while investors hold out for pivotal UK economic reports and news of international trade talks. • GBP/USD hovers near 1.3600 as the Pound slightly improves during Thursday’s European session. • US dollar falls on uncertainty surrounding future reciprocal tariffs that will kick in on August 1. • Bank of England issues a warning over economic threats, such as geopolitical tensions, increasing sovereign debt, and poor business morale. • British factory and GDP data for May are expected; GDP is expected to increase by 0.1% following a reduction in April. • US President Trump announces 50% tariffs on copper imports and new trade measures with 21 countries. • FOMC minutes reveal ambivalent sentiment with two members of the Fed supporting interest rate cuts in July. • Technical indicators hint at a neutral trend with RSI around 50 and price around the 20-day EMA. The Pound Sterling was stable against the US Dollar on Thursday as market focus continued to be on international trade updates and UK economic risks. The British currency remained resilient in spite of a conservative mid-year Financial Policy Committee (FPC) report from the Bank of England, cautioning of increasing risks to the UK economy. The report also noted risks like geopolitical tension, disintegration of global trade, stress on sovereign debt, and low investment sentiment. These risks, says the FPC, threaten financial stability and may have implications for future economic growth. GBP/USD DAILY PRICE CHART SOURCE: TradingView Meanwhile, in the United States, the trade landscape continued to evolve as President Trump announced new reciprocal tariffs affecting 21 nations, including major partners like Japan and South Korea. These tariffs are set to take effect on August 1 and are part of a broader push for more favorable trade terms. Though trade deals with the UK and Vietnam have been agreed, those with other important partners like China, Canada, Mexico, and the Eurozone are uncertain. The threat of escalating trade tensions is making global markets tread carefully, as investors seek clear signals on the direction of international trade relationships. TECHNICAL ANALYSIS GBP/USD pair is moving near the 20-day Exponential Moving Average (EMA) at 1.3590, reflecting a neutral short-term trend. The 14-day Relative Strength Index (RSI) is around the 50.00 mark, indicating a lack of significant momentum in either direction. A fall below the important psychological support level of 1.3500 may indicate fresh selling pressure, and a strong break above 1.3700 may set the stage for further advances towards the multi-year high around 1.3800. Overall, the duo seems to be in the process of consolidation, waiting for new catalysts for directional action. FORECAST If there are positive breakthroughs in US trade talks, especially with major partners such as China, Canada, and the Eurozone, investor appetite for risk would grow, weakening the US Dollar and boosting the Pound Sterling. Also, better-than-forecast UK GDP and factory production statistics would improve faith in the British economy, hopefully driving GBP/USD to resistance points at about 1.3700 and, if the rally is sustained, as high as the three-and-a-half-year peak around 1.3800. Conversely, if the US is unable to secure trade agreements prior to the August 1 tariff deadline, global trade tensions may escalate sharply, supporting the safe-haven US Dollar. In addition, if future UK economic data is disappointing or concern regarding increasing national debt and geopolitical risks accelerates, the GBP might be pressured. A fall below the 1.3500 psychological support point may lead to further losses towards the next significant point at 1.3400.

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Currencies GBP/USD

Pound Sterling Dips Below 1.3400 on US-Iran Tensions Fueled Safe-Haven Demand for Dollar

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  • June 23, 2025
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Pound Sterling (GBP) fell sharply against the US Dollar (USD), dropping below the 1.3400 level as geopolitical tensions between the United States and Iran surged. The weekend US military attack on Iranian nuclear facilities triggered a dash for safety, fueling demand for the US Dollar as a safe-haven asset. Despite upbeat UK flash PMI data showing stronger-than-expected growth in business activity, market sentiment remained risk-averse. The situation worsened as Iran threatened retaliation and considered closing the Strait of Hormuz, adding to global economic uncertainty. Meanwhile, investors await key US PMI data and signals from the Federal Reserve regarding potential rate cuts. KEY LOOKOUTS • Increasing tensions between the US and Iran, such as possible retaliation and the threat of closing the Strait of Hormuz, can continue to push safe-haven flows towards the US Dollar. • In spite of better-than-forecast UK flash PMI readings, the Pound continues to come under pressure; subsequent data releases might find it difficult to change sentiment without geopolitical calm. • Converging signals from the Bank of England and US Federal Reserve, with the dovish tilt from the latter, will drive GBP/USD in the near term. • The pair has key support at 1.3250 and resistance at 1.3630, with a fall below the 20-day EMA indicating a bearish near-term trend. Pound Sterling continues to soften versus the US Dollar, dropping below 1.3400 as the increase in US-Iran tensions boosts safe-haven demand. Risk-averse mood in the market was strengthened by an unexpected US airstrike on Iranian nuclear sites, with the rise in concerns over regional stability and global oil supply interferences. The GBP is still under pressure despite the UK’s reporting of better-than-anticipated flash PMI numbers for June. With Iran warning of retaliation and talking of closure of the Strait of Hormuz, geopolitical uncertainty dominates economic indicators. Traders are waiting for US PMI data and other signals from the Federal Reserve regarding possible rate cuts, which may define the next steps for the GBP/USD pair. The Pound Sterling fell to below 1.3400 against the US Dollar amidst increased US-Iran tensions and flight to safe-haven assets. In spite of positive UK PMI readings, geopolitical uncertainties still weigh on the GBP. Investors now look towards forthcoming US PMI readings and Fed policy cues for more guidance. • GBP/USD dipped below 1.3400 amidst increasing US-Iran geopolitical tensions. • Demand for US Dollar rose as investors favored safe-haven assets. • US military attack on Iran nuclear facilities triggered risk aversion in global markets. • Iran retaliated threat and threatened to close Strait of Hormuz, a potential oil supply disruption. • UK flash PMI report topped expectations, with improved business activity. • Bank of England continued dovish tone, with gradual rate-cut forward guidance. • Fed Governor Waller signaled July rate cuts, putting pressure on USD gains if acted upon. Rising geopolitical tensions between Iran and the United States have provoked a change in global market sentiment that has forced investors into safe-haven investments such as the US Dollar. The Pound Sterling has been under strain as markets absorb the information of the US airstrikes against three Iranian nuclear sites—an operation that has significantly increased fears of reprisals and additional unrest in the Middle East. Iran’s reaction, a threat to shut the Strait of Hormuz, brings yet more risk into global energy supply chains, further unnerving investors and shifting attention away from the release of economic data.  GBP/USD DAILY PRICE CHART SOURCE: TradingView Elsewhere, in the United Kingdom, publication of positive flash PMI numbers for June revealed strength in both manufacturing and services sectors, with the Composite PMI improving more strongly than anticipated. Even so, this upbeat economic growth has done nothing to support the Pound as wider geopolitical fears dominate. The Bank of England’s prudent monetary easing also confirms a wait-and-see policy as greater external threats come from increasing energy costs and worldwide tensions. Traders are keeping close watch on future US economic releases and other happenings in the Middle East to watch what the market does next. TECHNICAL ANALYSIS GBP/USD currency pair has a bearish bias, as it is trading below the 20-day Exponential Moving Average (EMA), which is standing at about 1.3477. This reflects ongoing downward pressure against the Pound Sterling. The 14-day Relative Strength Index (RSI) is just above the neutral 50 level, reflecting no dominant direction but rather a slightly bearish stance. To the downside, support is close to the May 16 low at 1.3250, which may serve as a key floor if the pair keeps falling. To the upside, resistance is visible close to the multi-year high of 1.3630, a level that needs to be broken to indicate a trend reversal. FORECAST If geopolitical tensions start to ease and risk mood improves, the Pound Sterling could gain some ground against the US Dollar. A resolution or de-escalation of the conflict between the US and Iran could lead to safe-haven demand for the Dollar diminishing, enabling GBP/USD to recover. On the other hand, if future US economic data falls short or the Federal Reserve indicates a more drastic rate-cut trajectory during July, the US Dollar will lose strength, resulting in upward momentum for the pair. Under such circumstances, the GBP/USD can aim for levels of resistance at 1.3477 and possibly hit the 1.3600 level if upbeat momentum is maintained. Conversely, if geopolitical tensions in the Middle East get worse or Iran strikes back, risk aversion in the market can intensify, driving demand for the US Dollar even higher and moving GBP/USD lower. A possible disruption in oil supply through the Strait of Hormuz can also spur global inflation concerns, making the Dollar’s safe-haven appeal even stronger. Moreover, any hints of UK economic slowdown or dovish Bank of England cues would enhance bearish pressure. In such an event, the pair could test 1.3250 support, with a breach below risking a slide to 1.3100 as the next major downside target.

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Currencies GBP/USD

Pound Sterling Slumps as UK PMI Falls; Market Eyes US Figures and BoE Policy Change

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  • April 23, 2025
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Pound Sterling lost considerable ground this week after UK preliminary PMI figures for April showed a surprise fall in business activity, led by a dramatic loss of strength in the services industry and major underlying weakness in manufacturing. The Composite PMI fell to 48.2, marking the first fall since October 2023, and causing worry over the general economic outlook. Increased recession concerns, muted domestic demand, and external uncertainties bore significantly on business optimism. In contrast, investor attention turns to forthcoming US PMI releases and potential Bank of England rate reduction in May as global inflation remains weak and wage growth slows, piling pressure on the Pound’s performance. KEY LOOKOUTS • Investors are increasingly pricing in a potential interest rate cut at the BoE’s May policy meeting due to weaker-than-expected inflation and wage growth data. • March retail sales figures, due Friday, will offer further insight into consumer spending trends and economic resilience amid growing contraction fears. • Market participants are closely watching the preliminary US PMI data for April, which could influence USD movement and cross-currency performance, including GBP/USD. • Increasing recession prospects, trade tensions, and defensive business attitudes are still pressurizing the UK economy and investors’ confidence in the Pound Sterling. Market participants are preparing themselves for a rocky trading week with several economic gauges and geopolitical events influencing mood. The Pound Sterling continues to face pressure in the wake of the sudden collapse in UK PMI numbers that indicated weakening business activity and an increase in recession fears. Investors now look to Friday’s UK Retail Sales report and the Bank of England’s next policy decision, with increasing anticipation of a May rate cut. On the other side of the Atlantic, the release of US flash PMI data for April is also under the spotlight, as it can shape the path of the US Dollar and general market dynamics. Amid lingering global uncertainty and cautious business outlooks, the Pound’s near-term performance hinges on upcoming economic cues and central bank actions. The Pound Sterling faces renewed pressure after UK PMI data signaled a contraction in business activity for April. Investors now await key economic data and the Bank of England’s next move, with rising expectations of a rate cut. Global uncertainty and cautious sentiment continue to shape market direction. • The UK’s Composite PMI dropped to 48.2 in April, marking the first decline in overall business activity since October 2023. • The Services PMI fell significantly to 48.9, below expectations and showing muted domestic demand. • The Manufacturing PMI dropped further to 44.0, marking ongoing difficulties in the sector. • Confidence in both services and manufacturing reached a two-and-a-half-year low due to increased global and domestic economic uncertainty. • Investors look for March UK Retail Sales, which is forecast to decline by 0.4% on a monthly basis, providing insight into consumer expenditure. • Soft inflation and wage growth figures have increased market expectations of a possible Bank of England rate reduction in May. • Focus also shifts to the next US flash PMI figures and global news, which may affect the Pound and overall market sentiment. Pound Sterling weakened after the release of dismal UK PMI figures for April, indicating that business activity in the UK had unexpectedly dipped. The services sector, which accounts for a significant proportion of the UK economy, experienced a sharp slowdown, with manufacturing also continuing to deteriorate. This is the first overall decrease in business activity since October 2023 and reflects increasing concern over the economic situation. Increasing global uncertainty and faltering domestic demand have further exacerbated the troubles for UK firms, and a decline in confidence among key industries has ensued. GBP/USD DAILY PRICE CHART CHART SOURCE: TradingView To accompany the PMI releases, other key economic data is being looked at by investors. Interest is being pinned on the release of UK retail sales later in the day, which will be further confirmation of consumer expenditure habits. Meanwhile, the likelihood of the Bank of England changing its interest rate strategy has been a subject of increasing interest, particularly with indications of slowing inflation and wage growth. In the meantime, events in the United States, such as new economic data and global trade negotiations, are also watched for their possible effects on world markets. TECHNICAL ANALYSIS GBP/USD currency pair indicated correction after hitting a multi-year high close to 1.3430, finding its way around the 1.3300 mark. The price is still supported by short- to long-term Exponential Moving Averages (EMAs), which are still trending higher, reflecting a bullish undertone despite recent setbacks. The Relative Strength Index (RSI), having reached overbought levels above 70, has now cooled down slightly, indicating a pause or minor correction in the trend. Major resistance is at the psychological 1.3500 level, while short-term support can be spotted near the April 3 high around 1.3200. FORECAST Although UK business has contracted lately, the longer-term prognosis for the Pound Sterling might receive some support if coming data surprises positively. Should Friday’s UK Retail Sales remain firm or the Bank of England refrain from caution when it comes to rate cuts, the Pound might regain some of its lost ground. Moreover, any indication of easing geopolitical tensions or better sentiment in the global economy might calm investor nerves and provide a tailwind for the Pound’s resurgence. The GBP/USD pair can test higher levels if global risk appetite increases and the US Dollar continues to weaken on softer US economic data. On the downside, continued weakness in UK economic indicators, such as another decline in consumer spending or deteriorating sentiment in the services sector, can bear more significantly on the Pound. If the Bank of England does proceed with an interest rate reduction in May or telegraphs dovish intent, it will tend to put greater selling pressure on GBP. Still, further and heightened escalation across global uncertainties like trade tensions and geopolitical uncertainty might prompt investors toward safe-haven currencies like the US Dollar at the expense of the Pound’s near-term performance.

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Currencies GBP/USD

Pound Sterling Rises Against 1.30 as Trump Tariff Concerns Weigh on US Dollar and Fed Outlook

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  • March 11, 2025
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The Pound Sterling maintains its bullish trend against the US Dollar, trading at a four-month high as investors prepare for major US inflation data. Increasing concerns of a tariff slowdown under President Trump have deepened dovish expectations on the Federal Reserve, with market participants increasingly factoring in a possible rate cut in May. At the same time, the Bank of England’s conservative but resolute approach to keeping policy tight in the face of ongoing wage-led inflation has supported confidence in the GBP. As the GBP/USD pair edges closer to the psychological 1.3000 level, future economic data from both the US and UK will be important in deciding the next direction. KEY LOOKOUTS • Traders increasingly wager on a May Fed rate cut as fear of Trump’s tariff-led economic slowdown grows. • Pound Sterling hardens near 1.2930, with the objective of crossing the key 1.3000 level in the face of ongoing BoE hawkish sentiment. • February CPI data will determine market expectations regarding Fed’s next steps and dictate wider USD sentiment. • Bank of England policymakers favor a gradual and cautious monetary policy unwinding, underpinning GBP outlook against global counterparts. The Pound Sterling is strengthening versus the US Dollar, trading around the 1.2930 level as anxiety heightens for an impending US economic slowdown brought on by proposed tariffs by ex-President Trump. This has pushed market speculation about a sooner-than-expected rate cut by the Federal Reserve with May now joining the list as a probable deadline. Conversely, the Bank of England takes a prudent but firm stance, with policymakers preferring a gradual pace in monetary loosening given sustained inflation pressures in the UK. As market participants wait for key US inflation and UK GDP reports, the GBP/USD currency pair remains highly bullish, targeting a breakout above the crucial psychological level of 1.3000. The Pound Sterling is trading close to 1.2930, gaining strength due to concerns of a Trump-induced US slowdown and increased Fed rate cut expectations. The Bank of England’s dovish approach also lends support to GBP momentum as markets wait for critical US inflation and UK GDP releases. • Pound Sterling is trading close to 1.2930, backed by hopes of an extended restrictive approach from the Bank of England. • US Dollar drops due to market anxiety of a tariff-driven economic slowdown in the United States under a Trump regime. • Fed rate cut expectations are on the rise, with a 51% chance of a May cut amidst dovish moods. • Investors wait for US CPI, expecting to influence the Fed’s monetary policy in view of lower inflation. • BoE policymakers prefer a measured policy unwind, taking a conservative stance even as inflation in the service sector remains persistent. • GBP/USD targets the 1.3000 resistance level, riding on bullish sentiment and solid market mood. • UK GDP and factory data on Friday, expected to post moderate growth and drive the Pound’s next direction. The Pound Sterling is strengthening against the US Dollar as market sentiment changes with increasing fears of a slowdown in the US economy. These concerns are primarily fueled by former President Donald Trump’s planned tariff agenda, which has created uncertainty regarding the future of trade and economic growth. Consequently, investors now increasingly anticipate the Federal Reserve to start reducing interest rates as soon as May, which shows a more dovish attitude towards US monetary policy. GBP/USD Daily Price Chart Chart Source: TradingView In the meantime, optimism in the Pound is also underpinned by the Bank of England’s prudent yet resolute attitude in keeping existing interest rates intact. Policymakers are confident that inflation, especially fueled by robust wage pressures, remains a threat to the UK economy and must be carefully watched. In light of BoE’s indicating a gradual transition to any impending policy adjustments, investors are keen on the performance of the Pound. Everybody now waits for the coming economic numbers from both the US and the UK, which will determine future market expectations. TECHNICAL ANALYSIS GBP/USD currency pair is displaying bullish strength as it trades above critical moving averages, reflecting a strong long-term positive trend. The pair is well supported around the 1.2930 area, with the next significant resistance at the psychological level of 1.3000. Momentum measures such as the Relative Strength Index (RSI) continue above the neutral zone, indicating that there is scope for further rally. On the negative side, earlier retracement levels can function as support if there is a pullback, maintaining the general outlook skewed towards buyers unless there is a big reversal pattern. FORECAST The GBP/USD pair has strong short-term bullish potential, particularly if future US economic releases, such as inflation and jobs data, continue to uphold hopes of a Fed rate reduction. A definitive break above the 1.3000 psychological level may open the way for additional gains, drawing in further bullish interest. Further backing from the Bank of England’s prudent policy stance and chronic domestic inflationary pressures in the UK can continue to reinforce the Pound, maintaining the trend in place. Although there is present bullish momentum, there could be downward risks should sentiment reverse or statistics surprise the investor community. A higher-than-expected US inflation report or any shift in the Fed’s sentiment could reactivate support for the US Dollar, pushing GBP/USD lower. Furthermore, should future UK GDP and factory data prove disappointing, then the appeal of the Pound would be undermined. Under these circumstances, the pair could experience downward correction toward previous support levels, forcing traders to reconsider the outlook.

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Currencies GBP/USD

GBP/USD Stays Strong Above 1.2650 on Soft US Jobless Claims and UK Economic Volatility

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  • February 21, 2025
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GBP/USD stays strong at above 1.2650, hitting a two-month peak of 1.2674 as the US Dollar falters on weak jobless claims figures. US Initial Jobless Claims increased to 219,000, topping forecasts, and mixed messages from Federal Reserve policymakers contributed to uncertainty in the market. Optimism in the wake of possible US-China trade developments supported the pair further. Nevertheless, fears over UK economic prospects remain, with Bank of England Governor Andrew Bailey issuing warnings regarding sluggish growth and a deteriorating labor market. A better-than-expected UK CPI release did little to quash Bailey’s description of the inflation surge as transient, leaving traders wary of impending policy action. KEY LOOKOUTS • The increase in US Initial Jobless Claims to 219,000 led to a weakening US Dollar, supporting GBP/USD but also creating doubts regarding labor market stability. • Bank of England Governor Andrew Bailey issued a warning of slow growth and easing labor market, casting further doubts on the long-term Pound Sterling strength. • Uncertainty regarding inflation and interest rate cuts by Fed officials sends mixed signals to traders, affecting market sentiment and GBPCAD price action. • Relief from potential gains in US-China trade negotiations alleviated market concerns, and it added further to support for GBP/USD in the short run. GBP/USD continues to stay above 1.2650, supported by a softer US Dollar on the back of increasing jobless claims and conflicting signals from the Federal Reserve. The rising US Initial Jobless Claims to 219,000 indicated potential labor market weakness, weighed on the USD and helped the Pound Sterling. In the meantime, Bank of England Governor Andrew Bailey’s caution regarding the slow UK economic growth and weakening labor market kept investors wary of the strength of the GBP. On the other hand, optimism over possible US-China trade negotiations progress gave risk assets some bullish push. But the uncertainty lies in the fact that the Federal Reserve is considering inflation risks and possible rate reductions, making the future direction of GBP/USD reliant on future economic releases and policy actions. GBP/USD continues to stay above 1.2650, helped by a weaker US Dollar on rising jobless claims and conflicting Fed cues. UK economic worries still exist, as BoE Governor Andrew Bailey warned of slow growth. In contrast, hopes regarding US-China trade negotiations provide some bullish push, though market volatility still exists. • The pair continues to remain above 1.2650, hitting a two-month peak of 1.2674 as the US Dollar weakens. • First-Time Jobless Claims rose to 219,000, beating forecasts and hinting at potential weakness in the labor market. • Bank of England Governor Andrew Bailey cautioned of weak UK growth and a declining labor market. • A more-than-forecasted UK CPI report temporarily pushed the Pound higher, but Bailey dismissed its longer-term relevance. • Fed officials are still skeptical of inflation and upcoming rate reductions, leaving traders on their guard. • Encouraging trade negotiation news between the US and China supported market sentiment somewhat. • Future direction of GBP/USD will be based on future economic indicators, central bank actions, and international trade dynamics. GBP/USD continues to be in the spotlight as the global economic landscape influences market mood. Recent economic data indicate the concern over US labor market stability, with an increase in jobless claims pointing towards possible economic difficulties. In the meantime, in the UK, economic growth and inflation remain among the topics of debate, with policymakers weighing external influences, including global trade patterns and monetary policy, that could affect stability over the longer term. Bank of England Governor Andrew Bailey has sounded a note of caution on the UK’s muted growth and changing labor market dynamics, indicating the importance of prudent policy decisions over the next few months. GBP/USD Daily Price Chart TradingView Prepared by ELLYANA Globally, there has been some relief for investors from optimism surrounding US-China trade talks, which has alleviated concerns over higher tariffs and possible supply chain disruption. Also, Federal Reserve officials have given conflicting opinions on inflation trends and future interest rate actions, further confusing financial markets. With both the US and UK economies going through tough times, market players are paying close attention to economic events and central bank actions that may determine financial conditions in the near term. TECHNICAL ANALYSIS GBP/USD still trades above important support levels, with its bullish trend close to recent highs. The pair recently reached a two-month high of 1.2674, reflecting strong buying interest. The price stays over the 50-day and 200-day moving averages, indicating an upward trend. Yet, resistance in the vicinity of 1.2700 can be a test, while short-term support is seen around 1.2600. Momentum indicators like the RSI indicate that the pair is heading towards overbought levels, so it can result in short-term consolidation prior to the next big move. Traders will be looking for confirmation cues to see if the pair is capable of maintaining its upward move or experience a pullback. FORECAST GBP/USD might continue to climb if sentiment remains bullish in the markets and economic indicators support the Pound. An extended breakout over the major resistance of 1.2700 might create opportunities for additional upward momentum, and the next critical resistance levels might be found near 1.2750 and 1.2800. Any weakness in upcoming US economic data, particularly in employment or inflation figures, could pressure the US Dollar further, allowing GBP/USD to climb higher. Additionally, if the Federal Reserve signals a dovish stance or hints at potential rate cuts sooner than expected, the Pound may find additional support. Positive developments in global trade, particularly between the US and China, could also boost risk appetite and drive demand for GBP. To the negative, GBP/USD can be pressured if economic issues in the UK become more severe or if risk appetite declines. Failure to stay above 1.2600 support could result in weakening towards 1.2550 and 1.2500. Any indication of UK economic data worsening, particularly in growth and employment, would cause market sentiment to turn against the Pound. Also, if the Federal Reserve becomes more hawkish, shoving back rate cut expectations, the US Dollar

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Currencies GBP/USD

Pound Sterling Appreciates on Market Sentiment: GBP/USD Tests Critical Resistance as Investors Look to Economic Releases

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  • February 20, 2025
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The Pound Sterling (GBP) has appreciated against the US Dollar (USD), trading at 1.2615 as market sentiment continues to improve. Investor sentiment has improved after President Trump’s moderated approach to tariffs and continued talks of a possible Russia-Ukraine ceasefire. Yet, doubts persist regarding the Federal Reserve’s monetary policy, as the most recent FOMC minutes emphasize ongoing inflation threats from possible tariff effects. The economic outlook for the UK is also uncertain, with Bank of England (BoE) Governor Andrew Bailey indicating weak growth and labor market deceleration. The British pound is capped at 1.2620, with future UK Retail Sales and S&P Global PMI figures set to dictate further price movements. KEY LOOKOUTS • Investors look forward to January’s retail sales report, which will give them an idea of consumer spending patterns and the general health of the UK economy. • The initial UK and US PMI readings for February will reflect economic activity patterns and may determine the short-term direction of the Pound Sterling. • FOMC minutes indicate sustained high interest rates based on inflation threats, which could maintain the US Dollar strong against the Pound Sterling. • The 1.2620 level of resistance and 1.2250 support zone are very important in specifying the next possible breakout or correction in the currency pair. The Pound Sterling’s shift against the US Dollar is dependent on several significant determinants, such as future UK Retail Sales figures and S&P Global PMI reports, due to release and offering new economic activity and consumer confidence insights. As for its counterpart, the Federal Reserve’s recent conservative position regarding interest rates, reflected in the most recent FOMC minutes, emphasizes inflationary pressures fueled by possible US tariff measures. This could keep the US Dollar strong, limiting GBP/USD upside potential. On the technical front, the pair faces resistance at 1.2620, aligned with the 100-day EMA, while key support rests at 1.2250. Market sentiment remains a key driver, with geopolitical developments and risk appetite influencing short-term trends. The Pound Sterling’s action against the US Dollar continues to be guided by UK Retail Sales figures, PMI data, and the Federal Reserve’s interest rate stance. With 1.2620 acting as resistance and 1.2250 as support, geopolitical concerns and market sentiment will dictate the direction of the currency pair. • GBP/USD is trading at 1.2615 as market sentiment picks up pace, boosted by diminishing fears about Trump’s tariff policies and optimism in geopolitics. • Investors look forward to January’s retail sales figures, which will give an indication of consumer expenditure and possible economic recovery. • The UK and US February preliminary PMI figures will be instrumental in determining business activity and economic resilience. • The FOMC minutes indicate sustained high interest rates as a result of inflation fears, which may favor the US Dollar. • UK CPI increased more than expected, but the BoE is still hesitant to cut rates further due to economic weakness. • GBP/USD is resisted at 1.2620 and major support at 1.2250, where it will make its next move. • Market sentiment is influenced by news regarding Trump’s trade policies and continued Russia-Ukraine peace talks. The movement of the Pound Sterling is now being dictated by wider economic and geopolitical events. Investors are following UK Retail Sales figures and S&P Global PMI closely, which will paint a clearer picture of economic activity and consumer confidence. A better-than-anticipated retail performance will indicate strength in the UK economy, while PMI figures will reveal business conditions in the UK and US. Also, recent inflation data have indicated a short-term spike, and as a result, the Bank of England has kept monetary policy tight. Governor Andrew Bailey has already cautioned that growth could be slow, and any additional policy moves will be based on new data. GBP/USD Daily Price Chart TradingView Prepared by ELLYANA On the international front, market sentiment has been better because of a more cautious approach by President Trump on trade policies. Although early fears about tariffs on Chinese imports and other major sectors caused volatility, Trump’s recent statements on a potential trade deal with China have calmed fears. But uncertainty persists as there is no clear plan on tariff implementation. While meanwhile, talks on a possible Russia-Ukraine ceasefire have also fostered a risk-positive sentiment, though Ukraine dismissed any agreement in the absence of its direct participation. As conditions in the world economy and politics change, investors will be careful, keeping an eye on critical events that would affect market stability. TECHNICAL ANALYSIS GBP/USD currency pair is fighting to sustain above the 1.2600 level, and resistance is situated at 1.2620, which is coinciding with the 100-day Exponential Moving Average (EMA). The duo is now oscillating around the 38.2% Fibonacci retracement point, calculated from the September-end high to the January-middle low, which represents a key area for possible breakout or pullback. The 14-day Relative Strength Index (RSI) is barely managing to stay above 60.00, and if it fails to hold above this level, it could signal weakening bullish momentum. On the negative side, major support is at 1.2250, and a fall below this level may initiate further selling pressure. To have a stronger uptrend, GBP/USD must break above the 50% Fibonacci retracement at 1.2767, which would signal a continuation of bullish sentiment. FORECAST The potential for the upside in GBP/USD relies on better market sentiment and major economic data releases. If UK Retail Sales for January and February S&P Global PMI reports surpass predictions, this is likely to be a confidence booster for the UK economy, driving the Pound upward. Favorable change in Brexit developments or better-than-forecasted employment statistics are additional strengths for the currency. Furthermore, if the Federal Reserve is hinting at a softer approach towards interest rates in light of slowing inflation, the US Dollar might depreciate, leaving GBP/USD more space to move upwards. Breaking above the resistance level of 1.2620 might signal more upward gains towards the 1.2767 area, suggesting positive momentum. On the negative, any indication of economic weakness within the UK, for example poor retail sales or a fall

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