British Pound holds steady near 1.3450 as US-Iran strikes intensifyThe GBP/USD pair trades on a flat note around 1.3450 during the early Asian session on Monday. Traders continue to assess the developments surrounding US-Iran tensions after the US said that a third American troop was killed in the past two days. The UK employment report will be in the spotlight later on Tuesday.
The US reported the death of another American service member, who was killed in northern Iraq during the controlled detonation of a downed Iranian drone. US Central Command (CENTCOM) also said on Sunday that it has located unidentified remains in Jordan, where a separate Iranian attack left two US troops dead and one missing in action, per Bloomberg. Read more...
British Pound slips for second straight day as Oil spike revives inflation fearsThe Pound Sterling retreats during the North American session, down 0.22% against the Greenback, as geopolitical tensions remained high, triggering a jump in Oil prices and heightening fears of a reacceleration of inflation. The GBP/USD trades at 1.3449 after peaking near 1.3480.
Hostilities in the Middle East continued with the US attacking Iranian infrastructure, according to Iran’s army spokesperson, who warned that attacks on Oil facilities could trigger retaliation, saying that “either all countries in the region can export Oil or no one can.” As tensions rose, Oil prices jumped, with WTI, the US crude Oil benchmark, gaining over 1.50% to $80.78 per barrel. Read more...
British Pound: Burnham policy hopes underpin Sterling against US Dollar – ScotiabankScotiabank’s Shaun Osborne and Eric Theoret notes GBP/USD is lower on the day and well off its one-year high reached on optimism that incoming PM Burnham will pursue market-friendly policies. Despite late-week slippage, that view remains. The new government is expected to allow new North Sea drilling and bring Thames Water back under public control, while trend oscillators stay bullish and analysts look for firm support near 1.34.
"Sterling is down on the day and well off the 1-year peak seen earlier this week around optimism that Burnham—who takes over as PM next week—will follow market friendly policies. Despite the pound’s late week slippage, that outlook appears to remain intact." Read more...
The Pound Sterling retreats during the North American session, down 0.22% against the Greenback, as geopolitical tensions remained high, triggering a jump in Oil prices and heightening fears of a reacceleration of inflation. The GBP/USD trades at 1.3449 after peaking near 1.3480. Read More...
GBP/USD Price Forecast: British Pound extends weakness in process of UK leadership changeThe British Pound (GBP) extends its decline against the US Dollar (USD) for the second straight day on Friday, trading 0.4% lower to near 1.3427 during the European trading session on Friday. The GBP/USD pair faces selling pressure as the British currency weakens amidst the process of the United Kingdom (UK) leadership change. Read More...
British Pound weakens as US Dollar advances on rising risk aversionGBP/USD extends its losses for the second successive day, trading around 1.3460 during the Asian hours on Friday. The currency pair underperforms as the US Dollar (USD) draws safe-haven support from intensifying geopolitical conflicts in the Middle East, just ahead of the preliminary Michigan Consumer Sentiment Index for July. Read More...
US Dollar Talking Points: The USD retains a bullish lean from daily and weekly charts and that has held over the past week despite below-expected inflation data on Tuesday and Wednesday. As looked at in the Tuesday webinar, the response to counter-trend stimuli is telling for trend construction, and the question for next week is whether EUR/USD bears can make a push-lower as the pair has stalled just below the 1.1500 handle. The true test of trend is what happens in the face of counter-trend stimuli. Do bulls come in to defend the higher-low, looking at the sell-off as opportunistic? Or do they cut bait and run, allowing for further support breaks and an opening door for reversal potential.
We had such a scenario this week in the USD, where both CPI and PPI printed below expectations. Markets are still primed for rate hike potential into the end of the year and that’s helped to keep the USD in a bullish spot from both weekly and daily charts.
US Dollar Weekly Chart Chart prepared by James Stanley; data derived from Tradingview With US rate hike expectations still holding despite that below-expected CPI and PPI data, USD/JPY retains breakout potential.
I looked into this one in-depth on Monday, highlighting the fact that a below-expected inflation print could allow for pullback, which is what happened. And then buyers jumped on the bid which further highlights bullish continuation potential as there’s now been a continuation of higher-lows.
At this point, buyers haven’t yet wanted to test beyond the 163 level, and that’s helped to create a symmetrical triangle which normally is a non-directional formation. But given the prior trend, that triangle points to a bull pennant formation, which retains a topside bias for continuation scenarios and this remains my most attractive venue for USD-strength.
USD/JPY Daily Price Chart Chart prepared by James Stanley; data derived from Tradingview EUR/USD For next week, I think EUR/USD carries a lot of weight for the USD and in-turn, major FX pairs. There’s an ECB rate decision on Thursday and since the breakdown in the pair in late-June, there’s been stalling over the past few weeks. So far, we’ve had a hold of resistance around 1.1469, but the higher-lows that have built over the past few weeks suggest that the move is already well priced-in and I think ideally, a counter-trend move with a test up to or around 1.1500 could make for a more attractive backdrop for bears.
There’s the risk of a short-squeeze type of scenario, as well, so I want to circle a deeper resistance zone in that event and for that, there’s a prior support-turned-resistance area running from 1.1576 up to 1.1613.
EUR/USD Daily Chart Chart prepared by James Stanley; data derived from Tradingview GBP/USD For USD-weakness, I’m still in favor of GBP/USD and the pair put in another fresh high this week even as the USD held support at prior resistance. For next week, it’s UK CPI on Wednesday that’s the big focal point and I had looked into the pair in the Wednesday article, with GBP/USD having since held support at the ‘s1’ area on the chart, around 1.3450.
Deeper support remains around the 1.3390 Fibonacci level up to the 1.3400 zone, and then the 1.3325 level is the ‘s3’ and if bulls can’t hold prices above that, then USD-strength has probably taken over and the breakout USD/JPY would be a more attractive venue to track that theme, in my opinion.
GBP/USD Daily Price Chart Chart prepared by James Stanley; data derived from Tradingview --- written by James Stanley, Senior Market Analyst, Global Macro
Key Points:GBP/USD remains under pressure as pullback continues. USD/CAD attempts to settle below the support at 1.4010 - 1.4025.USD/JPY remains stuck near the 162.50 level.
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U.S. Dollar Continues To Rebound As Traders Focus On Consumer Sentiment Data
DXY 170726 4h Chart U.S. Dollar Index gains ground as traders focus on the better-than-expected Michigan Consumer Sentiment report. The report indicated that Michigan Consumer Sentiment increased from 49.5 in June to 54.4 in July, compared to analyst forecast of 51.
Today, traders also had a chance to take a look at housing market data. Housing Starts increased by +19% month-over-month in June, compared to analyst forecast of 0%. Building Permits decreased by -3%, while analysts expected that they would drop by -0.7%.
U.S. Dollar Index settled above the support at 100.50 – 100.65 and is moving towards the 50 MA at 100.90. In case U.S. Dollar Index manages to settle above the 50 MA, it will move towards the resistance level at 101.15 – 101.30.
EUR/USD Is Mostly Flat Ahead Of The Weekend EUR/USD 170726 4h Chart EUR/USD is stuck near the support level at 1.1420 – 1.1435 as traders focus on U.S. economic data. Industrial Production increased by +0.1% month-over-month in June, compared to analyst consensus of +0.2%.
In case EUR/USD manages to settle below the 1.1420 level, it will head towards the next support, which is located in the 1.1350 – 1.1365 range. On the upside, a move above the 1.1450 level will push EUR/USD towards the resistance at 1.1500 – 1.1515.
GBP/USD Remains Under Pressure GBP/USD 170726 4h Chart GBP/USD tested new lows as pullback continued. Traders focused on the rally in the oil markets, which was triggered by rising tensions in the Middle East.
If GBP/USD stays below the 1.3450 level, it will head towards the 50 MA at 1.3413. A move below the 50 MA will open the way to the test of the support level at 1.3335 – 1.3350. RSI remains in the moderate territory, so there is plenty of room to gain momentum in the near term.
On the upside, a successful test of the resistance at 1.3450 – 1.3465 will open the way to the test of the next resistance level at 1.3535 – 1.3550.
USD/CAD Tests Support At 1.4010 – 1.4025
USD/CAD 170726 4h Chart USD/CAD is losing ground as traders focus on rising gold and silver prices. Other commodity-related currencies are mixed in today’s trading session. There are no important economic reports scheduled to be released in Canada today, so traders will stay focused on general market sentiment.
USD/CAD continues its attempts to settle below the support at 1.4010 – 1.4025. If USD/CAD manages to settle below the 1.4010 level, it will head towards the next support, which is located in the 1.3915 – 1.3930. RSI has moved back into moderate territory, but there is some room to gain additional downside momentum in the near term.
USD/JPY Stays Close To Multi-Decade Highs USD/JPY 170726 4h Chart USD/JPY remains stuck near the 162.50 level as traders focus on dynamics of Treasury yields. The yield of 2-year Treasuries climbed above the 4.16% level, while the yield of 10-year Treasuries settled below 4.55%.
Traders are cautious amid worries about potential interventions from the Bank of Japan. However, BoJ’s interventions failed to provide support to the yen in 2026. In case USD/JPY manages to settle above the 162.80 level, it will gain additional upside momentum and head towards the 165.00 level.
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Vladimir is an independent trader, with over 18 years of experience in the financial markets. His expertise spans a wide range of instruments like stocks, futures, forex, indices, and commodities, forecasting both long-term and short-term market movements.
Scotiabank’s Shaun Osborne and Eric Theoret notes GBP/USD is lower on the day and well off its one-year high reached on optimism that incoming PM Burnham will pursue market-friendly policies. Despite late-week slippage, that view remains. The new government is expected to allow new North Sea drilling and bring Thames Water back under public control, while trend oscillators stay bullish and analysts look for firm support near 1.34.
Political shift and technical support at 1.34"Sterling is down on the day and well off the 1-year peak seen earlier this week around optimism that Burnham—who takes over as PM next week—will follow market friendly policies. Despite the pound’s late week slippage, that outlook appears to remain intact."
"The Burnham government looks poised to strike out in a different direction than Starmer’s. Reports suggest that he will permit new drilling permits for oil and gas in the North Sea (Labour under Starmer veered away from boosting North Sea energy) and will announce plans to take the troubled Thames Water utility back under public control (Starmer preferred a private sector solution). President Trump will like the “drill, baby drill” look to the new government, at least."
"Neutral/bullish—Solid gains in the GBP Wednesday have partially reversed over the balance of the week. Trend oscillators lean bullish on the intraday, daily and weekly DMIs which should help sustain the broader trend higher going forward."
"We look for firm support on dips to the 1.34 zone."
(This article was created with the help of an Artificial Intelligence tool and reviewed by an editor. Know more.)
The Pound Sterling could extend its recent gains against the US dollar as a shift in UK political sentiment improves confidence in Sterling, according to UniCredit. The Italian bank says expectations that Andy Burnham will appoint a fiscally conservative Chancellor have created a potential “wind of change” for UK assets, easing concerns over public finances and providing support for the Pound.
GBP/USD was trading around 1.3450 on Friday after rising more than 1.7% in July, recovering from June's decline and moving back above the 1.35 area earlier in the week.
Why UK Politics Could Support Sterling UniCredit says Sterling's recent strength has been driven by expectations surrounding the incoming UK government and, in particular, the choice of Chancellor.
Reports that current Home Secretary Shabana Mahmood is the frontrunner for the role have reduced market concerns that Burnham could pursue a more expansionary fiscal approach.
The bank argues that fiscal credibility has become a crucial factor for investors following recent concerns over rising UK borrowing needs.
A more conservative approach to government finances could reduce pressure on gilt markets and improve confidence in Sterling.
Gilts Are Sending a Positive Signal
UniCredit highlights the reaction in UK government bonds as an important indicator of improving market sentiment.
Following reports on the expected Chancellor appointment, gilts rallied, with the 10-year UK yield falling below 4.92% after reaching close to 5.20% in May.
The bank notes that concerns over UK fiscal policy had previously pushed gilt yields higher and weighed on the Pound.
However, current market conditions are very different from the September 2022 mini-budget crisis, when unfunded tax cuts triggered a sharp sell-off in UK assets and sent GBP/USD to record lows.
Can GBP/USD Continue Higher? UniCredit believes the recent improvement in sentiment could allow further Sterling gains if expectations around the new government are confirmed.
The bank notes that GBP/USD has already moved above 1.35 for the first time since May, while EUR/GBP has fallen below 0.85 to multi-year lows.
Technical indicators suggest GBP/USD could target 1.37 if positive sentiment continues.
However, UniCredit cautions that it is still too early to determine whether this represents a lasting shift in investor positioning or simply a short-term reaction to political developments.
The Bank of England Could Add Further Support Another factor supporting Sterling is the possibility that markets continue pricing a Bank of England rate increase later this year.
UniCredit says that if expectations of a November rate hike remain in place, the summer period could prove far less damaging for Sterling than political uncertainty earlier in the year had suggested.
A combination of improved fiscal confidence, stronger gilt performance and supportive rate expectations could therefore provide further support for the Pound.
What's the Forecast for the Pound versus the US Dollar? UniCredit sees scope for GBP/USD to extend its recovery if the improving political backdrop is sustained.
The bank highlights 1.37 as the next potential target for the pair, while acknowledging that further gains depend on continued investor confidence in the new UK government's fiscal approach.
With GBP/USD currently near 1.3450, Sterling has already recovered significantly from its June lows, but UniCredit believes the recent political shift could provide further upside momentum.
GBP/USD Forecast FAQWhy is UniCredit positive on the Pound?
UniCredit believes expectations of a fiscally conservative UK Chancellor could improve investor confidence, support gilts and reduce concerns over government borrowing.
What is UniCredit's GBP/USD target?
The bank highlights 1.37 as a potential next target for GBP/USD if positive market sentiment continues.
Why are UK gilts important for Sterling?
Gilt yields and demand from investors are closely linked to confidence in UK fiscal policy. Stronger gilt performance can support the Pound by reducing concerns over government finances.
Could political uncertainty still hurt GBP/USD?
Yes. UniCredit says it is too early to confirm whether the recent move represents a lasting change in sentiment, meaning Sterling remains sensitive to developments surrounding the new government.
GBP/USD eased toward 1.3400 as investors sought the safety of the US dollar following renewed US-Iran tensions. The British pound struggled to build on recent gains despite signs that the UK economy is stabilising and a new Labour government pledging a pro-business agenda. Markets are now looking to next week's UK inflation and employment data for clues on the Bank of England's next interest rate decision. The GBP/USD exchange rate edged lower on Friday as renewed demand for the US dollar outweighed support for the British pound from improving UK economic data and political developments.
Sterling had strengthened earlier this week after softer US inflation data weakened the dollar. However, sentiment shifted as escalating military tensions between the United States and Iran lifted crude oil prices and revived fears that inflation could remain elevated for longer.
That has driven investors back into the US dollar, leaving the pound on the defensive despite encouraging signs from the UK economy.
Why Is GBP/USD Falling Today? The main driver behind Friday’s decline in GBP/USD has been a renewed flight to safety.
The conflict between the United States and Iran has intensified, raising concerns over global oil supplies and pushing crude prices sharply higher. Rising energy prices threaten to reverse recent progress on inflation, prompting investors to reconsider expectations that the Federal Reserve will begin cutting interest rates in the near future.
The US dollar typically benefits during periods of geopolitical uncertainty because it remains the world’s primary reserve currency and one of the most widely used safe-haven assets. As demand for the greenback increased, GBP/USD came under renewed selling pressure.
Is the British Pound Overvalued Against the US Dollar? Another factor weighing on sentiment is growing concern that sterling’s recent rally may have gone too far. Analysts at ING argue that the pound is trading above its short-term fair value after markets priced in aggressive expectations for additional Bank of England tightening.
The bank believes investors have become overly optimistic about UK interest rates and expects EUR/GBP to move back toward 0.870 over the coming months, implying broader weakness in sterling.
If expectations for further Bank of England tightening continue to fade, the British pound could struggle to maintain its recent gains against the US dollar.
Will UK Inflation and the Bank of England Move GBP/USD? Attention is now turning to next week’s UK inflation and labour market reports, which could prove decisive for the direction of GBP/USD.
If inflation remains stubbornly high or wage growth surprises to the upside, investors may increase expectations that the Bank of England will keep interest rates elevated for longer, supporting the pound.
Conversely, weaker economic data would strengthen the case for policy easing and could add further pressure to sterling. At the same time, traders will continue monitoring Federal Reserve commentary, US inflation trends and developments in the Middle East, all of which remain key drivers of the US dollar.
GBP/USD Outlook The near-term outlook for GBP/USD will depend on which narrative dominates financial markets.
If geopolitical tensions continue to fuel higher oil prices and Treasury yields, the US dollar is likely to remain well supported. However, if UK inflation proves more persistent than expected and the Bank of England maintains a hawkish stance, sterling could recover some of its recent losses.
With monetary policy expectations evolving on both sides of the Atlantic, upcoming economic data and geopolitical headlines are likely to determine the next move in GBP/USD.
Why is GBP/USD falling today?
GBP/USD is falling as renewed US-Iran tensions have increased demand for the US dollar, while higher oil prices have raised concerns that inflation could remain elevated, supporting expectations for higher US interest rates.
Will Andy Burnham’s policies affect the British pound?
Investors are watching Andy Burnham’s economic agenda closely because government fiscal policy can influence inflation, economic growth and Bank of England interest rate decisions, all of which affect the value of the British pound.
What could move GBP/USD next?
The next major catalysts for GBP/USD include UK inflation and employment data, Bank of England policy expectations, Federal Reserve commentary and any escalation in geopolitical tensions that could strengthen demand for the US dollar.
GBPUSD managed to pass above resistance 1.3430 while managed to meet target 1.3510 and above
As we see over the chart, a chance for trading zone between support 1.3320-50 and resistance 1.3555 may hold the market
Above 1.3555 more advance will be expected with resistance at 1.3655
Below 1.3320 more drop will be expected with support at 1.3160
SUPPORT RESISTANCE LEVEL1 1.3320-50 1.3555 LEVEL2 1.3160 1.3655 LEVEL3 1.3010 1.3850 Head of Technical Analysis at Orbex, Rami Abu Draa
holds a bachelor's degree in Banking, Finance and Economics. A professional trader and mentor with over 10 years of industry experience, Rami is passionate about sharing his knowledge with Orbex clients from basic to advanced concepts of Technical Analysis, Investment psychology and Investment/Trading methodologies. He is able to combine fundamental and technical principles to deliver a unique perspective on the markets that enables Orbex traders to identify high-probability trading opportunities.
The British Pound (GBP) extends its decline against the US Dollar (USD) for the second straight day on Friday, trading 0.4% lower to near 1.3427 during the European trading session on Friday. The GBP/USD pair faces selling pressure as the British currency weakens amidst the process of the United Kingdom (UK) leadership change.
Pound Sterling Price Today The table below shows the percentage change of British Pound (GBP) against listed major currencies today. British Pound was the weakest against the Swiss Franc.
USDEURGBPJPYCADAUDNZDCHFUSD0.12%0.33%-0.03%-0.04%0.40%0.23%-0.13%EUR-0.12%0.21%-0.17%-0.19%0.26%0.11%-0.25%GBP-0.33%-0.21%-0.37%-0.41%0.03%-0.09%-0.47%JPY0.03%0.17%0.37%-0.02%0.44%0.24%-0.10%CAD0.04%0.19%0.41%0.02%0.46%0.29%-0.08%AUD-0.40%-0.26%-0.03%-0.44%-0.46%-0.18%-0.53%NZD-0.23%-0.11%0.09%-0.24%-0.29%0.18%-0.36%CHF0.13%0.25%0.47%0.10%0.08%0.53%0.36% 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).
Andy Burnham becomes Labour leader on Friday, but he will not become Prime Minister (PM) until Monday, as PM Keir Starmer will officially deliver his resignation to King Charles that day,
While the Pound Sterling has been underperforming from Thursday, it is set to end the week on a positive note. The currency performed strongly earlier this week after reports from Financial Times (FT) that incoming PM Burnham will name Shabana Mahmood as Finance Minister (FM), who is considered a fiscal conservative by financial markets.
On the economic data front, investors await the UK employment data for the three months ending May and the Consumer Price Index (CPI) data for June, which will be released next week.
Meanwhile, the US Dollar trades marginally higher amid fears of a resurgence in United States (US) inflation amid elevated energy prices on the back of continued aggression in the Middle East.
GBP/USD technical analysis
GBP/USD trades sharply lower at around 1.3430. However, the pair maintains a modest bullish bias as spot remains above the 20-day exponential moving average (EMA) at 1.3380. The pair declines after facing selling pressure near the downward-sloping border of the Descending Triangle formation above 1.3500.
The Relative Strength Index (14) at 54.9 sits in neutral-positive territory, hinting that buying pressure is constructive but not yet overextended.
On the downside, immediate support is located at the 20-day EMA around 1.3380, where a sustained break would undermine the current positive tone and expose a deeper correction towards 1.3300. On the topside, the first key obstacle is the descending resistance trend line near 1.3515; a daily close above this barrier would reinforce the bullish bias and open the door to further gains in the days ahead.
(The technical analysis of this story was written with the help of an AI tool. Know more.)
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.
Cable struggles as the pair met firm resistance after pushing over 100 pips in the past session.
• Not even a lift in GDP data could prevent the pound from slipping away from the 1.3500 level.
• With the RSI majorly overbought, a brief bounce to the downside could ensue.
• 1.3400 is the first hurdle to break before price action takes the pair back to the recent swing low at 1.3340.
• A move back past 1.3500 sees 1.3550 being the top to break.
USDCAD breaks lower
The Canadian dollar continues its advance as prices move away from the 1.4100 area.
• The pair remains under some pressure as its recent descent might lead to a reversal.
• A bullish divergence on the RSI is likely to attract buying interest in the near term as previous sellers look to switch sides.
• 1.4060 is the first target to expect sellers to close positions.
• A fall below 1.4000 would extend the sell-off towards 1.3960.
USOIL consolidating
WTI hits another fresh high as economists expect a test at the $82 level by the end of this week.
• As a show of resilience, the price has managed to hover around the psychological area of 80.00.
• Bulls will need to lift the 82.00 level before they can end the lengthy consolidation and push for a broader recovery.
• On the downside, 78.00 is the first support to keep the current momentum intact, with 75.50 a firm backup.
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The Pound to Dollar (GBP/USD) exchange rate weakened on Thursday as escalating conflict in the Middle East drove investors towards the safe-haven US Dollar despite another positive UK political development.
At the time of writing, GBP/USD was trading at $1.3499, down around 0.3% on the day.
Latest — Exchange Rates:
Pound to Dollar (GBP/USD): 1.347769 (-0.46%)
Euro to Dollar (EUR/USD): 1.14428 (-0.23%)
Dollar to Yen (USD/JPY): 162.36824 (+0.19%)
DAILY RECAP:
The safe-haven US Dollar (USD) found some support on Thursday, as escalating tensions in the Middle East soured the market mood.
Sentiment had been relatively resilient since the US and Iran renewed hostilities, but with the fighting intensifying, risk appetite began to fade.
The US expanded its attacks into northern Iran, with strikes also hitting around the Iranian capital of Tehran.
US President Donald Trump also threatened to target Iranian infrastructure, such as bridges, with Tehran vowing to retaliate by targeting infrastructure in US-allied Gulf states.
With the conflict escalating, the US Dollar firmed amid renewed safe-haven demand.
Meanwhile, the Pound (GBP) edged lower as Sterling gave back part of the strong gains it posted in the previous session.
The UK currency had surged on Wednesday after reports suggested Shabana Mahmood had overtaken Ed Miliband as the leading contender to become Chancellor under incoming Prime Minister Andy Burnham.
Markets had been uneasy about the prospect of Miliband taking the role, amid expectations he could favour looser fiscal policy. By contrast, Mahmood is viewed as a more fiscally orthodox choice, with reports of her likely appointment proving reassuring for investors.
Even so, Sterling was unable to extend its advance on Thursday, despite UK GDP data matching expectations with a modest 0.1% expansion in May.
Instead, traders appeared to lock in profits after the previous day's rally, leaving the Pound on the back foot.
Near-Term GBP/USD Forecast: Consumer Confidence to Support the US Dollar? Looking ahead, the key data release on Friday will be the University of Michigan’s latest consumer sentiment index in the US.
Markets expect American household morale to have improved in July, with the index set to rise from 49.5 to 51. This could underpin the US Dollar.
Meanwhile, market risk appetite may also influence the safe-haven ‘Greenback’. If geopolitical tensions escalate further, an anxious mood may support USD.
As for the Pound, a lack of UK data could limit Sterling. That said, political optimism may continue to provide some support for GBP.
Key Points:Strong U.S. retail sales and resilient jobless claims reinforced expectations that the Fed will keep rates higher for longer.DXY remains below trendline resistance, with a break above 100.77 needed to revive near-term bullish momentum.EUR/USD continues consolidating beneath key resistance while holding above both major moving averages.GBP/USD remains in a broader uptrend as buyers defend trendline support despite the recent pullback.
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US Dollar News: Strong Data Reinforces Fed’s Cautious Stance The U.S. Dollar’s technical profile is underpinned by better than expected data which highlighted steady retail sales and a strong jobs market. June retail sales saw 0.2% month on month growth while the control group rose 0.4%, both indicating underlying resilience in consumer demand. Initial jobless claims came in at 221,000 which highlighted a strong labour market. The data has tempered expectations that the Fed will start cutting rates this year as retail sales and unemployment remain relatively strong even though overall growth has slowed.
Meanwhile, The Euro’s outlook is weighed down by slowing growth prospects in the eurozone with the ECB keeping rates stable at its 2.25% deposit rate, according to futures.
Sterling has also found support following the central bank’s hawkish policy stance after UK inflation remains too high. The consensus is that policymakers will be holding the Bank Rate at 3.75%. This view is consistent with persistent price pressures as well as some easing in the labor market, both before the next rate decision.
US Dollar Technical Analysis: DXY Rejected Below Trendline as Bears Defend 100.77 Dollar Index Price Chart – Source: Tradingview The US Dollar Index (DXY) is at 100.69, after another test off the descending trendline at 100.77 resistance. DXY remains below 100.79 (50 EMA) and 100.87 (100 EMA) and the trendline which has been a source of repeated tests, confirming the short term bearish bias.
The 100.61 support level is followed by 100.52 and 100.35 while 100.77 resistance is followed by 101.03.RSI has dropped to ~47, indicating a potential slowdown in buyer momentum and a neutral-bearish tone overall. I’ll wait for the market to trade through 100.77 on my way to 101.03, with 100.61 being an important key level to flip if traded through.
GBP/USD Technical Analysis: Pullback Holds Above Trendline as Uptrend Remains Intact GBP/USD Price Chart – Source: Tradingview GBP/USD is near 1.3472 after a retreat from last week’s highs around 1.3559. Buyers are defending the trendline, as GBP/USD remains above the 50 EMA at 1.3449 and the 100 EMA at 1.3415. The price remains bullish despite a short term decline since higher highs and higher lows are intact on a larger picture.
GBP/USD faces 1.3507 resistance, with 1.3560 resistance ahead of that. Price is supported by 1.3449, which is followed by 1.3340 support. The RSI cooled to ~51, indicating that the correction has likely been a short term dip rather than a trend reversal. I’ll look to trade a breakout through 1.3507 on my way to 1.3560, with a drop below 1.3449 likely targeting 1.3340.
EUR/USD Technical Analysis: Bulls Hold Above 50 EMA While Testing Key Resistance EUR/USD Price Chart – Source: Tradingview The Euro is at 1.1450, consolidating below the 1.1461 resistance level after extending its rally in the previous sessions. The 1.1437 (50 EMA) and 1.1431 (100 EMA) levels are still supporting price action and the market remains bullish despite being turned down by overhead resistance.
The trend structure resembles a tightening symmetrical triangle with 1.1412 support at 1.1379. The 1.1461 resistance is followed by 1.1493.
The RSI is hovering around ~54, indicating a low degree of bullish momentum with room before entering overbought territory. I’ll wait for confirmation of a 1.1461 breach on my way to 1.1493, with a breakdown at 1.1412 likely sending price back toward 1.1379.
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Arslan is a finance MBA and also holds an MPhil degree in behavioral finance. An expert in financial analysis and investor psychology, Arslan uses his academic background to bring valuable insights about market sentiment and whether instruments are likely to be overbought or oversold.
United Overseas Bank (UOB) strategists Quek Ser Leang and Christopher Wong note GBP/USD has corrected sharply from recent highs near 1.3556 but now looks set to consolidate between 1.3450 and 1.3520 intraday. The 1–3 week outlook still sees renewed upward momentum, with 1.3590 as a key level to monitor, while a break below 1.3450 would point to a period of consolidation before any further gains.
Pound steadies after sharp retreat"24-HOUR VIEW: Two days ago, GBP surged to a high of 1.3556. Yesterday, when GBP was at 1.3540, we indicated the following: “The sharp rally appears excessive, but with no sign of pause yet, GBP could continue to rise. However, given the deeply overbought conditions, any advance could be limited to a test of 1.3560.” Our assessment turned out to be incorrect, as GBP did not test 1.3560. Instead, it retreated sharply to a low of 1.3460 before closing 0.43% lower at 1.3480. The sharp pullback has stabilised somewhat, and instead of continuing to decline today, GBP is more likely to trade in a range between 1.3450 and 1.3520."
"1-3 WEEKS VIEW: After GBP surged on Wednesday, we indicated yesterday (16 Jul, spot at 1.3540) that “the renewed upward momentum suggests that GBP has resumed its advance.” We also highlighted that “the level to monitor is 1.3590.” We did not expect GBP to pull back sharply to 1.3460. Upward momentum has eased somewhat, and a breach of 1.3450 (no change in ‘strong support’ level) would suggest that GBP could consolidate first before pushing higher."
(This article was created with the help of an Artificial Intelligence tool and reviewed by an editor. Know more.)
British Pound weakens below 1.3500 as US launches new wave of strikes against IranThe GBP/USD pair trades on a softer note around 1.3470 during the Asian trading hours on Friday. Geopolitical tensions in the Middle East trigger risk-off market sentiment and weigh on the Cable. The preliminary reading of the Michigan Consumer Sentiment Index for July is due later on Friday.
The United States (US) has carried out major strikes on Iran for the sixth day in a row. Officials in southern Iran’s Bandar Abbas reported that civilian infrastructure, including power facilities and a train station, has been hit. Read more...
The British Pound Sterling gets a new Prime Minister and an old problemSterling is enduring its heaviest session of the month, with GBP/USD fading around half of one percent to just below 1.3500 after the week's advance stalled short of 1.3550 for a second consecutive day. The pullback trims a July run that has carried the Pound roughly 400 pips off the yearly low printed just below 1.3150, and it arrives with the daily Stochastic Relative Strength Index pressing overbought territory near 90, exactly the setup in which extended rallies get taxed.
Thursday's London data gave Sterling nothing to work with. Gross Domestic Product (GDP) grew 0.1% MoM in May, barely reversing April's contraction, while industrial production fell 0.5% against expectations for a far shallower dip, and only a modest manufacturing beat kept the morning from reading as an outright stall. A Bank of England (BoE) deputy governor then delivered remarks that markets scored as unmistakably dovish for the speaker, leaning on growth risks rather than the inflation overshoot. Read more...
Scotiabank strategists Shaun Osborne and Eric Theoret note GBP/USD is slightly weaker as it gives back part of yesterday’s strong advance, helped by expectations of a centrist, market-friendly Burnham government. United Kingdom (UK) data were mixed, with robust Gross Domestic Product (GDP) offset by softer Industrial Production. From a technical perspective, they argue the early July bull reversal remains intact and see scope for gains toward at least 1.3650.
Bull trend targets retest of 1.3650"The GBP is a mild underperformer on the session as markets give back some of yesterday’s solid gains. Investors appear to have been cheered by reports suggesting that team Burnham has vetoed Ed Miliband as an option for chancellor, preferring instead current Home Sec. Mahmood."
"PM-to-be Burnham’s rumored top team is going to be centrist which also means market-friendly. But that will ruffle feathers of left-wingers who effectively pushed Starmer out."
"UK data released earlier was mixed. UK May GDP was stronger than forecast, rising 0.7% in 3m/3m terms. The UK economy saw solid growth in H1 overall. But May Industrial Production was weaker than expected (-0.5% M/M), albeit with very mixed components while the Trade deficit narrowed."
"Bullish—Sterling has given back a little of yesterday’s solid gain but the spurt higher has livened up the charts and sets the pound up for a further extension of the early July bull reversal."
"The fresh short-term cycle high and a bullish alignment of short-, medium-, and long-term trend oscillators suggest minor dips are a buy and that GBP gains can extend towards a retest of 1.3650 at least in the near-term. EUR/GBP is trading back from yesterday’s one-year low but technical trends here also look positive for the pound overall."
(This article was created with the help of an Artificial Intelligence tool and reviewed by an editor. Know more.)
The Pound Sterling trims some of its Wednesday gains versus the US Dollar, down by over 0.48% following solid US data. The sell-off comes amid risk aversion and augments the safe-haven appeal of the Greenback. At the time of writing, the GBP/USD trades at 1.3375, after peaking near 1.3545. Read More...
British Pound remains muted as UK monthly GDP rises 0.1%, as expectedThe British Pound (GBP) remains almost muted against its major currency peers after the release of the monthly United Kingdom (UK) Gross Domestic Product (GDP) data for May. The Office for National Statistics (ONS) has reported that the economy expanded 0.1%, as expected, after contracting at a similar pace in April. Read More...
British Pound weakens below 1.3550 on renewed US strikes on IranThe GBP/USD pair declines to near 1.3530 during the early Asian session on Thursday. The British Pound (GBP) weakens against the US Dollar (USD) as renewed conflict and shipping disruptions in the Strait of Hormuz have reignited energy-driven inflation risks. Traders brace for the UK monthly Gross Domestic Product (GDP) report and the US Retail Sales data, which are due later on Thursday. Read More...
Key Points:GBP/USD pulled back as traders reacted to economic reports from U.S. and UK. USD/CAD made an attempt to settle below the support level at 1.4010 - 1.4025.USD/JPY gained ground amid rising Treasury yields.
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U.S. Dollar Moves Higher As Traders React To Economic Data
DXY 160726 4h Chart U.S. Dollar Index gains ground as traders react to the Retail Sales report. The report indicated that Retail Sales increased by +0.2% month-over-month in June, in line with analyst estimates. Retail Sales Ex Autos declined by -0.2%, compared to analyst forecast of -0.1%.
Today, traders also had a chance to take a look at the Initial Jobless Claims report. The report indicated that 208,000 Americans filed for unemployment benefits in a week, compared to analyst consensus of 217.000. The report showed that labor market remained in decent shape, which was bullish for the U.S. dollar.
NAHB Housing Market Index decreased from 36 (revised from 35) in June to 34 in July, compared to analyst forecast of 35.
U.S. Dollar Index climbed above the support at 100.50 – 100.65 and is trying to settle above the 100.75 level. In case this attempt is successful, U.S. Dollar Index will head towards the 50 MA at 100.92. A move above the 50 MA will open the way to the test of the resistance at 101.15 – 101.30.
EUR/USD Retreats As Traders Take Profits After Recent Rebound EUR/USD 160726 4h Chart EUR/USD pulls back as traders focus on economic reports from the U.S. Pending Home Sales declined by -5.4% month-over-month in June, compared to analyst forecast of -0.5%.
The nearest support level for EUR/USD is located in the 1.1420 – 1.1435 range. A successful test of this level will open the way to the test of the next support, which is located in the 1.1350 – 1.1365 range.
GBP/USD Pulls Back As UK Industrial Production Misses Estimates GBP/USD 160726 4h Chart GBP/USD is losing ground as traders focus on UK GDP report. The report showed that UK GDP increased by +0.1% month-over-month in May, in line with analyst consensus.
Manufacturing Production increased by +0.1% month-over-month in May, compared to analyst forecast of -0.2%. Industrial Production decreased by -0.5%, while analysts expected that it would drop by -0.1%.
In case GBP/USD manages to settle below the support level at 1.3450 – 1.3465, it will head towards the 50 MA at 1.3400. A move below the 50 MA will open the way to the test of the next support level at 1.3335 – 1.3350.
USD/CAD Tests Support At 1.4010 – 1.4025 USD/CAD 160726 4h Chart USD/CAD is mostly flat despite the strong pullback in precious metals markets. Gold declined below the psychologically important $4000 level, while silver tested strong support at $56.00. Other commodity-related currencies are losing some ground in today’s trading session.
Currently, USD/CAD is trying to settle below the support at 1.4010 – 1.4025. In case USD/CAD settles below the 1.4010 level, it will move towards the next support level at 1.3915 – 1.3930. RSI is close to the oversold territory, but there is enough room to gain additional downside momentum in the near term.
USD/JPY Gains Ground As Treasury Yields Rebound USD/JPY 160726 4h Chart USD/JPY is moving higher as traders react to the rebound in Treasury yields. The yield of 2-year Treasuries moved above the 4.17% level, while the yield of 10-year Treasuries climbed above 4.58%.
USD/JPY is moving towards multi-decade highs near the 162.80 level. In case USD/JPY manages to settle above 162.80, it will gain additional upside momentum and head towards the 165.00 level.
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Vladimir is an independent trader, with over 18 years of experience in the financial markets. His expertise spans a wide range of instruments like stocks, futures, forex, indices, and commodities, forecasting both long-term and short-term market movements.
GBP Talking Points: The British Pound retains relative strength, with GBP/USD setting a fresh monthly high yesterday, even as EUR/USD held lower-high resistance. GBP/JPY, however, has been in full breakout mode. I looked into this at the Tuesday webinar and the move has stretched all the way into a major Fibonacci level just below the 220 handle.
While USD bulls came back to life from mid-April through last month, GBP/USD has held up relatively well. The pair did test a fresh low in late-June but support held at a key Fibonacci level of 1.3143, and that’s where the music stopped for sellers and since then a strong bullish reversal has taken over that’s seen Cable rip for more than 400 pips into yesterday’s fresh monthly high.
This Fibonacci level carries some historical importance, as well, as the 38.2% retracement of the 2025 rally, and this came into play in August of that year to hold the lows with another instance of support, albeit messier, a couple months later.
GBP/USD Weekly Chart Chart prepared by James Stanley; data derived from Tradingview GBP/USD On a shorter-term basis prices are pulling back from the fresh high set yesterday, and the question now is when or where a higher-low might appear. The 1.3500 handle certainly seems to be playing a role but perhaps more interesting is a spot of prior resistance, down around 1.3450 that would be an ideal spot for buyers to defend. And then below that, the 1.3390 Fibonacci level up to the 1.3400 handle. And for an ‘s3’ support, there’s a prior swing-low turned swing-high that stands out around 1.3325.
GBP/USD Four-Hour Chart Chart prepared by James Stanley; data derived from Tradingview GBP/JPY I looked into GBP/JPY in the Tuesday webinar and at the time, the pair was set up in an ascending triangle formation. Buyers have since made a mark with a rally of more than 200 pips, and now we have price pushing into a longer-term Fibonacci level of note at 219.39 following the print of a fresh 18-year high.
GBP/JPY Monthly Chart Chart prepared by James Stanley; data derived from Tradingview Similar to albeit with more relative strength, we have the move pulling back in a short-term counter-trend dynamic. Given the veracity of the breakout, however, we’re also further away from any nearby possible swing points, as prior resistance is all the way down around 217.84 and for that to come into play we’d need a retracement of more than 100 pips from current market price. Ideally, for bullish continuation, buyers would remain more aggressive than that, and something like this is where Fibonacci can come into play as the recent rally has so far only given back 23.6% of the move.
The 38.2% retracement of that same move sets up as support potential, and this would be a more attractive area for bulls to show hints of topside continuation. From that same retracement, 218.41 and 218.04 would also be of interest.
GBP/JPY Two-Hour Price Chart Chart prepared by James Stanley; data derived from Tradingview --- written by James Stanley, Senior Market Analyst, Global Macro
GBP/USD remained supported after UK GDP returned to growth in May while softer US producer inflation weakened the US dollar. The British pound continues to draw support from improving economic data and expectations of fiscal stability under the incoming UK government. Markets are now focused on next week's UK inflation and employment reports for fresh direction in GBP/USD. The GBP/USD exchange rate held firm after fresh economic data showed the UK economy returned to modest growth while easing inflationary pressures in the United States reduced support for the US dollar.
The Office for National Statistics reported that the UK economy expanded 0.1% in May, matching market expectations and reversing April’s contraction. Although growth remains modest, the data suggests Britain’s economy continues to avoid a deeper slowdown despite elevated borrowing costs.
Meanwhile, the US dollar remained under pressure after June’s Producer Price Index (PPI) increased less than expected, reinforcing expectations that inflation is gradually cooling and reducing pressure on the Federal Reserve to tighten monetary policy aggressively.
UK GDP Growth Supports the British Pound Sterling found support after official data showed the UK economy returned to growth during May.
The monthly GDP report indicated that economic activity expanded by 0.1%, ending the previous month’s decline. While the pace of growth remains relatively slow, investors viewed the data as another sign that the UK economy continues to show resilience despite higher interest rates.
The positive GDP reading partially offset weaker industrial production figures, which contracted 0.5% during the month and highlighted ongoing challenges for Britain’s manufacturing sector.
For currency markets, however, the broader picture remains encouraging. Continued economic growth reduces concerns about a sharp slowdown and provides additional support for the pound.
Softer US Inflation Reduces Dollar Strength The US dollar eased after June’s Producer Price Index showed wholesale inflation slowed more than economists had expected.
The data followed a softer Consumer Price Index report earlier in the week, strengthening expectations that US inflation continues moving in the right direction.
Lower inflation reduces the likelihood of additional aggressive Federal Reserve rate increases, limiting one of the dollar’s biggest sources of support over the past two years.
Although the greenback continues to benefit from occasional safe-haven demand linked to geopolitical tensions, improving inflation data has encouraged investors to reassess the outlook for US interest rates.
That has helped GBP/USD remain well supported despite broader uncertainty across financial markets.
Political Stability Adds Support to Sterling Investor sentiment toward the pound has also improved following reports that incoming Prime Minister Andy Burnham is expected to appoint Shabana Mahmood as Chancellor. Financial markets generally view Mahmood as fiscally disciplined, reducing concerns over significant changes to government spending or borrowing.
Currency traders typically favour predictable fiscal policy because it improves confidence in long-term economic stability. While political developments remain secondary to interest rate expectations, they have provided an additional layer of support for sterling during the past week.
UK Inflation and Jobs Data Become the Next Major Catalyst Attention is now shifting to next week’s UK economic calendar. Investors will closely watch inflation and labour market reports for further clues about the Bank of England’s next policy decision.
Stronger-than-expected wage growth or persistent inflation could reinforce expectations that UK interest rates remain elevated for longer, providing additional support for the pound.
Conversely, weaker economic data may revive speculation that the Bank of England could begin easing policy sooner than markets currently anticipate. At the same time, traders will continue monitoring US economic releases and Federal Reserve commentary for fresh signals about the outlook for the dollar.
What This Means for GBP/USD The near-term outlook for GBP/USD remains closely tied to monetary policy expectations on both sides of the Atlantic.
The combination of improving UK economic growth, softer US inflation and expectations of fiscal stability has helped support sterling in recent sessions. However, the pair remains highly sensitive to incoming inflation data, central bank communication and broader global risk sentiment.
With both the Bank of England and the Federal Reserve adopting cautious policy stances, the next major economic releases could determine whether GBP/USD extends its recovery or returns to a more defensive footing.
Why is GBP/USD rising today?
GBP/USD is finding support after the UK economy returned to growth in May and softer US inflation data weakened the US dollar. Expectations that the Federal Reserve may take a more cautious approach to future interest rate decisions have also supported the currency pair.
How does UK GDP affect the British pound?
Stronger UK GDP growth generally supports the pound because it signals a healthier economy and can influence expectations for Bank of England interest rate policy. Higher growth often improves investor confidence in the UK economy.
What are traders watching next for GBP/USD?
Markets are focused on next week’s UK inflation and employment data, as well as upcoming Federal Reserve commentary. These events are expected to provide fresh clues about future interest rate decisions and could drive the next move in GBP/USD.
The GBP/USD pair attracts some sellers on Thursday and erodes a part of the previous day's strong gains to an over two-month high, around the 1.3555-1.3560 region. Spot prices stick to modest intraday losses around the 1.3525 zone through the first half of the European session, though the broader setup favors bullish traders and warrants caution before positioning for any further fall.
As investors digest this week's soft US Consumer Price Index (CPI) and Producer Price Index (PPI) reports, elevated crude oil prices revive energy-driven inflation fears and US Federal Reserve (Fed) rate hike expectations. This, along with escalating US-Iran tensions, offers some support to the safe-haven US Dollar (USD) and turns out to be a key factor exerting pressure on the GBP/USD pair.
The British Pound (GBP), on the other hand, might continue to draw support from easing UK political uncertainty and growing optimism over the UK's fiscal outlook. In fact, the incoming UK Prime Minister, Andy Burnham, has pledged to anchor his policy agenda on fiscal discipline and is expected to pick a fiscally conservative finance minister. This helps limit the downside for the GBP/USD pair.
From a technical perspective, the overnight breakout through the 61.8% Fibonacci retracement level of the May-June fall was seen as a fresh trigger for bulls against the backdrop of the recent repeated rebounds from the 1.3350 confluence. A subsequent strength beyond the 1.3500 psychological mark validates the constructive outlook for the GBP/USD pair and backs the case for further gains.
Moreover, the Moving Average Convergence Divergence (MACD) histogram is positive, and the line remains above zero. That said, the Relative Strength Index (RSI) at 72.2 signals overbought conditions that could slow the pace of gains rather than reverse the broader constructive tone. This makes it prudent to wait for some near-term consolidation or a modest pullback before the next leg up.
Meanwhile, immediate resistance is seen at the 78.6% Fibo. level at 1.3547, ahead of the recent cycle high, and at 1.3657, which would be the next target if bulls extend control. On the downside, initial support is located at the 61.8% retracement at 1.3461, followed by the 50.0% level at 1.3401. Deeper pullbacks would find a stronger demand around the 200-period SMA and the 38.2% level confluence at 1.3345-1.3340.
(The technical analysis of this story was written with the help of an AI tool. Know more.)
GBP/USD 4-hour chart
Pound Sterling Price This week The table below shows the percentage change of British Pound (GBP) against listed major currencies this week. British Pound was the strongest against the Japanese Yen.
USDEURGBPJPYCADAUDNZDCHFUSD-0.55%-0.98%0.23%-0.81%-0.75%-1.53%-0.11%EUR0.55%-0.45%0.80%-0.27%-0.25%-0.99%0.45%GBP0.98%0.45%1.21%0.18%0.20%-0.54%0.95%JPY-0.23%-0.80%-1.21%-1.13%-0.98%-1.80%-0.39%CAD0.81%0.27%-0.18%1.13%0.15%-0.68%0.78%AUD0.75%0.25%-0.20%0.98%-0.15%-0.74%0.61%NZD1.53%0.99%0.54%1.80%0.68%0.74%1.50%CHF0.11%-0.45%-0.95%0.39%-0.78%-0.61%-1.50% 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).
United Overseas Bank’s (UOB) Quek Ser Leang and Lee Sue Ann note that GBP/USD has surged to a two‑month high, with deeply overbought conditions but scope for further gains. Intraday, upside is seen limited to a test of 1.3560 while holding above 1.3480. On a 1–3 week view, renewed momentum suggests the Pound has resumed its advance, with 1.3590 the level to monitor and strong support at 1.3450.
Overbought Pound still has upside scope"24-HOUR VIEW: We did not expect GBP to surge to a high of 1.3556 yesterday (we had expected range-trading). The sharp rally appears excessive, but with no sign of pause yet, GBP could continue to rise. However, given the deeply overbought conditions, any advance could be limited to a test of 1.3560. The major resistance at 1.3590 is unlikely to come under threat. To sustain the overbought momentum, GBP must not break below 1.3480 (minor support is at 1.3510)."
"1-3 WEEKS VIEW: Our most recent narrative was from Monday (13 Jul, spot at 1.3375), when we highlighted that “the GBP advance from late last month has ended.” We also highlighted that “for the time being, we expect GBP to trade in a range between 1.3320 and 1.3445.” In a sudden move yesterday, GBP lifted off and broke above 1.3445, surging to a high of 1.3556. The renewed upward momentum suggests that GBP has resumed its advance. That said, short-term conditions are deeply overbought, and the pace of any further advance is likely to be slower. The level to monitor is 1.3590. We will maintain a positive GBP stance as long as it holds above the ‘strong support’ level, currently at 1.3450."
(This article was created with the help of an Artificial Intelligence tool and reviewed by an editor. Know more.)
GBP/USD Jumps to Two-Month High on Chancellor Reports and Softer Fed Outlook GBP/USD has climbed to a two-month high above 1.35 as investors continue to scale back Federal Reserve rate hike expectations and welcome reports over the UK's next Chancellor.
Reports that Home Secretary Shabana Mahmood will be appointed Chancellor by incoming Prime Minister Andy Burnham have helped to reassure the market and ease concerns. The market had been fretting that Burnham could appoint a more fiscally expansionary candidate, such as Ed Miliband. UK government gilt yields are edging lower on the news.
Meanwhile, UK GDP data showed the economy returned to growth in May after contracting in April. GDP rose 0.1% month-on-month, beating expectations for no growth following April's 0.1% decline.
Looking beneath the headline, the services sector, which accounts for around 80% of the UK economy, expanded 0.3%. However, construction output fell 0.8%, while industrial production declined 0.5%, suggesting the recovery remains uneven.
Looking ahead, renewed tensions in the Middle East could cloud the outlook for the economy. Oil prices have risen to a monthly high, weighing on the economic outlook while increasing the risk of higher inflation
Higher oil prices are reinforcing expectations that the Bank of England will tighten monetary policy later this year. Markets are now fully pricing in a 25 basis point rate hike in November, with another increase expected in March 2027.
Meanwhile, the U.S. dollar has fallen to a monthly low after softer-than-expected CPI and PPI data this week, which followed last week's weaker labour market report. Together, the data have prompted investors to rule out a July rate hike from the Federal Reserve.
Markets now price around a 70% probability of a 25 basis point rate hike in September.
However, downside in the dollar could prove limited. Renewed U.S.-Iran hostilities could support safe-haven demand for the greenback, while rising oil prices risk reigniting inflation concerns and lifting Treasury yields.
Attention now turns to today's U.S. retail sales report, which is expected to show sales rose 0.2% month-on-month in June after 0.9% growth previously. A stronger-than-expected reading could lend support to the dollar.
GBP/USD Forecast – Technical Analysis
GBP/USD has recovered from the 1.3200 support zone, breaking above both the 200-day SMA and the multi-month falling trendline to reach a high of 1.3550.
The breakout, together with the RSI holding above 50, keeps the near-term technical outlook constructive.
Buyers will look to extend gains towards 1.3600, followed by 1.3650, the May high. A move above there would bring 1.3800 into focus.
Initial support is seen around 1.3500, where the former trendline resistance has become support. A break below this level would expose the 200-day SMA near 1.3400, followed by horizontal support at 1.3340. Below there, sellers could target the 1.3200 support zone.
Oil Steadies Near $80 as U.S.-Iran Hostilities Remain in Focus Oil prices are holding near a monthly high, with WTI trading around $80 per barrel, as renewed tensions between the U.S. and Iran continue to underpin the market.
The U.S. reimposed a naval blockade on Iranian ports earlier this week, while Tehran has threatened to disrupt more regional energy exports as tensions between the two sides continue to escalate.
Although geopolitical risks remain supportive of crude prices, the market has paused after the sharp rally earlier this week.
Shipping through the Strait of Hormuz remains well below normal levels, with just seven vessels transiting the waterway on Wednesday, down from 13 a day earlier.
At the same time, mediation efforts by neighbouring countries continue. The fact that oil prices have stabilised around current levels suggests investors are not yet pricing in a full-scale regional conflict.
However, a geopolitical risk premium remains firmly embedded in the market. Any signs that Iran could use its Houthi allies in Yemen to disrupt shipping through the Bab el-Mandeb Strait would likely add further upward pressure to oil prices.
Looking further ahead, oil prices could remain elevated into the fourth quarter if export flows continue to recover only slowly, particularly with global inventories already depleted following substantial drawdowns during the second quarter.
Conversely, a sustained easing in tensions alongside a faster recovery in production could see crude prices move back towards the $60 area by year-end.
Oil Forecast – Technical Analysis
After breaking below its symmetrical triangle pattern and the 200-day SMA, oil found support around $67 before staging a strong recovery.
The price has now reclaimed the 200-day SMA and is testing key resistance around $80, where the psychological level coincides with the April low and the 61.8% Fibonacci retracement of the move from $55 to $120.
With the RSI above 50, buyers will look for a break above $80, which would expose $88, where the 50-day SMA, the falling trendline resistance and the 50% Fibonacci retracement converge. Above there, $95 comes into focus.
Failure to overcome the 50-day SMA could see support tested around the 200-day SMA at $74.40. A break below there would shift attention back towards the $67-$70 support zone.
The Pound to Dollar (GBP/USD) exchange rate edged higher on Wednesday as investors continued to scale back Federal Reserve interest rate expectations following weaker-than-expected US inflation data.
At the time of writing, GBP/USD was trading around $1.3404, up modestly on the day.
Latest — Exchange Rates:
Pound to Dollar (GBP/USD): 1.349901 (+0.77%)
Euro to Dollar (EUR/USD): 1.143596 (+0.10%)
Dollar to Yen (USD/JPY): 162.14472 (-0.03%)
DAILY RECAP:
The US Dollar (USD) struggled to attract support through the start of Wednesday’s European session as it continued to be weighed down by Tuesday’s US consumer price index.
A clear USD selling bias emerged following the release of the CPI figures, as they reported US inflation slowed at a much faster-than-expected pace through June.
The data saw USD investors question whether the Fed will deliver a 25bps rate hike by the end of summer, with the odds of a hike at the end of this month tumbling from over 40% to just 14%.
USD investors were also positioned for further weakness in the US Dollar on Wednesday, with the publication of the latest US producer price index, which was expected to point to an easing of factory gate inflation.
Meanwhile, while supported against the US Dollar, the Pound (GBP) was mostly rangebound against its other peers on Wednesday.
In the absence of any notable UK economic indicators, Sterling sentiment was undermined by an uptick in UK bond yields, with the 10-year gilts trading close to a two-month high.
Rising borrowing costs remain a major burden on the UK economy, and GBP investors fear they will pose a major fiscal challenge for incoming Prime Minister Andy Burnham.
Near-Term GBP/USD Forecast: Rebound in UK GDP to Lift Sterling? Turning to the second half of the week, the next catalyst of movement for the Pound to US Dollar (GBP/USD) exchange rate will be the release of the UK’s latest GDP figures on Thursday.
Month-on-month growth is expected to have turned positive in May, with consensus estimates predicting GDP will tick up from –0.1% to 0.1%.
While the rebound could help underpin Sterling in the latter half of the session, the Pound’s upside potential may be capped if the data still points to growth being uneven.
Meanwhile, the US will publish its latest retail sales figures on Thursday.
US sales growth is forecast to have slowed sharply last month, which, coupled with an expected rise in jobless claims in the first week of July, could keep the pressure on the US Dollar.
Key Points:U.S. retail sales and jobless claims could significantly influence Fed rate expectations and the dollar's next move.Stronger economic data would reinforce the higher-for-longer interest rate outlook, supporting the U.S. dollar.DXY remains under pressure below key moving averages as traders watch whether support at 100.35 can hold.EUR/USD confirmed a bullish triangle breakout, putting the focus on resistance near the 1.1493 level.GBP/USD remains in a strong uptrend above key moving averages, with buyers targeting the 1.3560 resistance.
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US Dollar News: Retail Sales Test Fed Rate Outlook US dollar is driven today by June retail sales release as well as latest weekly jobless claims. These data releases provide the key drivers as to where we see the Fed heading next. Market participants expect retail sales to report a 0.3% monthly gain after May’s 0.9% decline, while weekly initial jobless claims are also expected to rise modestly to 217,500 from 215,000 last week. If the US sees stronger than expected readings in today’s retail sales releases, together with jobless claims continuing at the lowest levels in history, this will reinforce the notion of continued economic strength in the US economy, leading to higher US rates for longer.
The euro is back in focus as the market thinks that the ECB will keep deposit rate at 2.25% and also its stance is that of data dependent to deal with the inflationary risk. Sterling now seems to be pricing in the Bank of England keeping rates steady with Bank Rate unchanged at 3.75% after a 7 to 2 vote to keep rates steady in June while looking at inflation which stood at 2.8%, labor market conditions softening, and geopolitics being another headwind.
US Dollar Index Technical Analysis: Will DXY Recover From $100.35 or Extend Its Decline?
Dollar Index Price Chart – Source: Tradingview US Dollar Index (DXY) is hovering around 100.48 as it has fallen below both the 50-EMA (at 100.90) and 100-EMA (at 100.86), giving short-term sellers the upper hand. A few sharp red candlesticks sent the index below the descending trendline and the Fibonacci support levels, and it is currently hovering above the 0 level at 100.35. Resistance is at 100.61, then 100.77 and 100.89.
RSI at 38 reflects weakening momentum, which means the pair is in oversold territory, indicating that downside pressures are strong although short-term consolidation could take place. With this in mind, I would avoid any trades until an apparent recovery to the upside of 100.61 is seen, where I would anticipate a trade around 100.89, although the downside of 100.35 remains a threat.
GBP/USD Technical Analysis: Can Bulls Extend the Breakout Toward $1.3560? GBP/USD Price Chart – Source: Tradingview GBP/USD is currently trading at 1.3537, holding above the rising trendline after surpassing the previous swing high. The pair trades higher than the 50-EMA (at 1.3401) and 100-EMA (at 1.3368) as it is clear that buyers still are in a leading position. The recent green candlesticks pushed the pair higher to an intraday high of 1.3559 after minor consolidation, which I would consider as profit-taking rather than a signal of any major trend change.
The 0.236 Fibonacci level at 1.3507 represents support now, with the next level at 1.3475. Resistance levels are at 1.3560 and then 1.3638. RSI at 61 shows the pair remains comfortably bullish and far away from overbought, indicating the room for further bullish momentum remains intact. With this in mind, I would buy when price trades above 1.3507 and target profit at 1.3560, however, if the pair falls below 1.3475, then the pair may retest the support of 1.3449.
EUR/USD Technical Analysis: Is the Break Above Triangle Resistance Opening the Door to $1.1493? EUR/USD Price Chart – Source: Tradingview EUR/USD is trading near 1.1468 after breaking out of the trendline to the upside of a descending pattern that has formed a triangle shape and regained the 50-EMA (at 1.1428) and the 100-EMA (at 1.1437). The recent candlesticks have closed higher than the earlier resistance zone near 1.1461, indicating that buyers have stepped in after a period of sideways consolidation.
Resistance at 1.1493 is now in place, with 1.1461 as support initially and then 1.1412 after that. RSI at 61 shows the bullish bias is building strength, however, is not yet considered overbought. With this in mind, I would buy when price trades above 1.1461, aiming at taking profit around 1.1493. But if the pair drops below 1.1412, the pair will become less attractive as a buy.
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Arslan is a finance MBA and also holds an MPhil degree in behavioral finance. An expert in financial analysis and investor psychology, Arslan uses his academic background to bring valuable insights about market sentiment and whether instruments are likely to be overbought or oversold.
GBP/USD Price Forecast: Maintains constructive uptrend above 1.3500 despite mild lossesThe GBP/USD pair trades with mild losses around 1.3535 during the early European trading hours on Thursday. Markets might turn cautious ahead of the UK Gross Domestic Product (GDP) report and the US Retail Sales data, which are due later on Thursday.
Traders raise their bets on rate hikes from the Bank of England (BoE) this year, given the expected impact on inflation from higher oil prices. Money markets are fully pricing in a hike by the November policy meeting, with a second rate hike priced in by April 2027, according to Reuters. Prior to the US-Iran war, traders had been expecting the BoE to lower interest rates twice this year. Read more...
British Pound weakens below 1.3550 on renewed US strikes on IranThe GBP/USD pair declines to near 1.3530 during the early Asian session on Thursday. The British Pound (GBP) weakens against the US Dollar (USD) as renewed conflict and shipping disruptions in the Strait of Hormuz have reignited energy-driven inflation risks. Traders brace for the UK monthly Gross Domestic Product (GDP) report and the US Retail Sales data, which are due later on Thursday.
The US military said it has launched another wave of strikes against Iran in a further effort to keep the Strait of Hormuz open, per the Guardian. Explosions were reported late on Wednesday on Iran’s Qeshm Island, Bandar Abbas, and locations in the Sistan-Baluchestan province. Read more...
The British Pound Sterling breaks out on the strength of someone else's weaknessCable spent the London morning drifting, printed the session low at 1.3381 shortly after 10:00 GMT, and then spent the New York afternoon repricing the entire Dollar complex. The Pound trades near 1.3540 at writing, up better than 1% in one of its strongest sessions of the year, after tagging 1.3558 and clearing both the 200-day Exponential Moving Average (EMA) and the 1.3400 handle in a single afternoon. The move answers a month of indecision around those levels with the subtlety of a brick.
The significance here is structural rather than cosmetic. The 50-day and 200-day EMAs sit clustered at 1.3376 and 1.3385, and most of July's price action had been compressed between that band and the 1.3400 shelf, a coil that has now released in one direction. A single session does not repair a downtrend that ran from late April into early July, but it does shift the burden of proof onto Dollar bulls for the first time in months. Read more...
The GBP/USD pair trades with mild losses around 1.3535 during the early European trading hours on Thursday. Markets might turn cautious ahead of the UK Gross Domestic Product (GDP) report and the US Retail Sales data, which are due later on Thursday.
Traders raise their bets on rate hikes from the Bank of England (BoE) this year, given the expected impact on inflation from higher oil prices. Money markets are fully pricing in a hike by the November policy meeting, with a second rate hike priced in by April 2027, according to Reuters. Prior to the US-Iran war, traders had been expecting the BoE to lower interest rates twice this year.
Technical Analysis:In the daily chart, GBP/USD extends its advance above the 100-day simple moving average (SMA) and comfortably above the 20-day Bollinger middle band, which together reinforce a bullish near-term bias. The pair is now pressing the upper Bollinger band around 1.3534, suggesting a stretched but still constructive upswing, while the Relative Strength Index (14) at about 65 hints at firm bullish momentum that is edging toward overbought territory rather than outright exhaustion.
On the downside, immediate support is seen at the 100-day SMA at 1.3400, with the Bollinger middle band at 1.3325 providing a deeper cushion if a corrective pullback unfolds. A more pronounced decline would likely target the recent volatility floor around the lower Bollinger band near 1.3117. On the upside, the first upside barrier emerges at the May 8 high of 1.3637. Any follow-through buying above this level could pave the way to the 1.3700 psychological level.
(The technical analysis of this story was written with the help of an AI tool. Know more.)
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.
The British pound was the standout performer among the major currencies on Wednesday, buoyed by a weaker US dollar and growing optimism over the UK's fiscal outlook. Sterling rallied across the board, lifting GBP/USD to a nine-week high while GBP/AUD rebounded from support to challenge key long-term resistance.
View related analysis:
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Source: LSEG
Sterling Surges on Treasury Pick Speculation as GBP/USD and GBP/AUD Rally The British pound surged across the board on Wednesday following reports that incoming UK Prime Minister Andy Burnham is considering Shabana Mahmood for Finance Minister. While Mahmood has little direct economic policy experience, markets view her as a fiscally cautious choice. Her appointment would also reduce the likelihood of Ed Miliband becoming Chancellor, a candidate investors perceive as more likely to increase public spending, boost borrowing and pursue ambitious net-zero spending plans.
British Pound Breaks Higher Against the US Dollar GBP/USD rallied 1.2% to a nine-week high during its strongest session in four months, closing decisively above 1.3500. Sterling also drew support from a weaker US dollar, which fell for a second consecutive session and is now within striking distance of the psychologically important 100 level on the US Dollar Index.
The 1-hour chart shows how explosive the rally was, producing seven consecutive bullish candles during its 146-pip advance without a meaningful pullback. Prices are now consolidating in a tight range above the monthly R1 pivot (1.3521). However, after such a sharp move, the pair may be overstretched, with the RSI (14) in overbought territory, so bulls may want to be on guard for a minor pullback. The daily pivot point sits just below 1.3500, while the 15 June high aligns with the weekly S1 pivot (1.3461), providing a potential support zone.
With the US dollar retracing lower and GBP/USD maintaining its bullish momentum, buyers may be eyeing a move towards the monthly R2 pivot (1.3636), just below the May high.
Source: ICE, TradingView
GBP/AUD Bulls Eye Break Above Key Long-Term Resistance Earlier this week, I was working on the assumption that GBP/AUD could fall. Its three-week rally had been accompanied by waning momentum, while the previous two weekly candles formed long upper wicks, culminating in a shooting star reversal below the 200-day EMA. That view appeared to be playing out on Tuesday as the pair pulled back to its 20-day EMA, although Wednesday's bullish engulfing candle suggests the pullback may already be over.
March High Remains the Key Bullish Hurdle for GBP Bulls With a well-established uptrend and a potential swing low forming around the 12 June high and 20-day EMA, bulls may be preparing for another attempt to break above the 200-day and 200-week EMAs. This paints a bullish near-term picture heading into today's session, although there is also a reasonable chance of a shakeout around 1.9400 given the significance of the long-term moving averages and the March high.
Even so, unless a clear bearish catalyst emerges for the British pound, I suspect GBP bulls will look to buy any dips in anticipation of a bullish breakout above the March high. If they succeed, the 1.9595 high comes into focus for GBP/AUD.
Key Points:GBP/USD rallied as traders reacted to U.S. PPI data. USD/CAD moved lower despite the pullback in precious metals markets. USD/JPY was mostly flat as traders ignored falling Treasury yields.
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U.S. Dollar Pulls Back As PPI Misses Estimates
DXY 150726 4h Chart U.S. Dollar Index is moving lower as traders react to Producer Prices report. The report indicated that Producer Prices decreased by -0.3% month-over-month in June, compared to analyst forecast of 0%. Core PPI increased by +0.2%, while analysts forecasted that it would grow by +0.4%.
Today, traders also had a chance to take a look at the NY Empire State Manufacturing Index report. The report showed that NY Empire State Manufacturing Index improved from 5.70 in June to 15.60 in July, compared to analyst consensus of 8.8.
Currently, U.S. Dollar Index is trying to settle below the support level at 100.50 – 100.65. In case this attempt is successful, U.S. Dollar Index will move towards the next support, which is located in the 99.75 – 99.90 range.
EUR/USD Remains Stuck Near The 1.1435 Level EUR/USD 150726 4h Chart EUR/USD is moving higher despite the weaker-than-expected Industrial Production report. The report indicated that Industrial Production decreased by -0.2% month-over-month in May, compared to analyst forecast of +0.2%.
The technical picture remains unchanged as EUR/USD is stuck near the resistance level at 1.1420 – 1.1435. If EUR/USD manages to settle above the 1.1435 level, it will head towards the resistance at 1.1500 – 1.1515.
GBP/USD Tests New Highs GBP/USD 150726 4h Chart GBP/USD rallied as traders reacted to the softer-than-expected U.S. PPI data and remained focused on U.S. CPI report, which was released yesterday.
GBP/USD climbed above the resistance level at 1.3450 – 1.3465 and is trying to settle above the 1.3500 level. In case this attempt is successful, GBP/USD will move towards the next resistance, which is located in the 1.3535 – 1.3550 range. It should be noted that RSI has moved into overbought territory, so the risks of a pullback are increasing.
USD/CAD 150726 4h Chart USD/CAD is moving lower despite the pullback in precious metals markets. Gold declined below the $4050 level, while silver settled below $57.00. Other commodity-related currencies are also moving higher in today’s trading session.
The nearest support level for USD/CAD is located in the 1.4010 – 1.4025 range. A successful test of this level will open the way to the test of the next support at 1.3915 – 1.3930. RSI is in the oversold territory, but there is some room to gain additional downside momentum in the near term.
On the upside, a move above the 1.4080 level will push USD/CAD towards the resistance level at 1.4125 – 1.4140.
USD/JPY Is Flat As Traders Ignore Falling Treasury Yields USD/JPY 150726 4h Chart USD/JPY is mostly flat despite the pullback in Treasury yields. The yield of 2-year Treasuries declined below the 4.15% level, while the yield of 10-year Treasuries settled near 4.55%.
Traders stay bullish due to the ultra-dovish policy of the Bank of Japan. The market believes that BoJ cannot raise rates without putting too much pressure on the Japanese economy.
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Vladimir is an independent trader, with over 18 years of experience in the financial markets. His expertise spans a wide range of instruments like stocks, futures, forex, indices, and commodities, forecasting both long-term and short-term market movements.
The Pound Sterling rises by some 0.60% against the US Dollar after the latest Producer Price Index (PPI) in the US showed prices edging lower, driven by the dip in energy prices since late May. At the time of writing, the GBP/USD trades at 1.3460 after bouncing off a daily low of 1.3370. Read More...
British Pound dips below 1.3400, turns negative on the day as US Dollar picks upThe British Pound (GBP) has retraced previous gains against the US Dollar (USD) on Wednesday, returning to the 1.3390 area from session highs of 1.3420 and turning negative on the daily chart. The safe-haven US Dollar has bounced up during the London session amid the risk-averse sentiment as US and Iran escalate their threats following the resumption of hostilities. Read More...
British Pound advances as US Dollar remains subdued following inflation dataGBP/USD rises for the second consecutive day, trading around 1.3400 during the Asian hours on Wednesday. The pair appreciates as the US Dollar (USD) holds losses following softer-than-expected US inflation data, fueling hopes that the US Federal Reserve (Fed) might adopt a less hawkish monetary stance. Read More...
British Pound Technical Outlook: GBP/USD Short-Term Trade Levels GBP/USD is attempting to break above a multi-month downtrend with bulls testing pivotal resistance at the yearly open today. A daily close above resistance would strengthen the case that a more significant low is in place and invalidate the May downtrend. Failure to sustain the breakout would keep the broader downtrend intact / threaten resumption. U.S. retail sales and Michigan confidence on tap into the close of the week- UK employment / CPI next week. Resistance 1.3460/74 (key), 1.3509, 1.3591/93- Support 1.3397, 1.3302/26 (key), 1.3187/94 GBP/USD is attempting to complete its most significant technical breakout in months after a 2.6% recovery off the yearly lows carried Sterling back into a major resistance zone defined by the yearly open and key Fibonacci retracement levels. The latest advance has improved the near-term technical outlook, but buyers still need confirmation above this pivotal barrier to invalidate the broader May downtrend. With the weekly opening-range already breaking to the upside, attention now turns to whether Sterling can build on this momentum and confirm a more durable trend reversal. Battle lines drawn on the GBP/USD short-term technical charts.
Review my latest Weekly Strategy Webinar for an in-depth breakdown of this Sterling technical setup and more. Join live on Monday’s at 8:30am EST.
British Pound Price Chart – GBP/USD Daily
Chart Prepared by Michael Boutros, Sr. Technical Strategist; GBP/USD on TradingView
Technical Outlook: In last month’s British Pound Short-term Outlook, we noted that GBP/USD had rebounded off downtrend support and that, “From a trading standpoint, rallies would need to be limited to 1.3326 IF price is heading lower on this stretch with a close below 1.3187 needed to fuel the next leg of the decline.” Sterling marked a six-day rally off the lows into the monthly cross with the advance extending nearly 2.4% off the June low. The rally exhausted into downtrend resistance last week with price straddling the 200-day moving average for the past five-days. The weekly opening range breaking today and the focus is on a reaction into the objective yearly open with a close above needed to keep the immediate advance viable and fuel the next leg higher.
British Pound Price Chart – GBP/USD 240min
Chart Prepared by Michael Boutros, Sr. Technical Strategist; GBP/USD on TradingView
Notes: A closer look at Sterling price action shows GBP/USD trading within the confines of an embedded ascending pitchfork extending off the May lows. Sterling is testing a major pivot zone today at 1.3460/74- a region defined by the 61.8% retracement of the May decline, the February low-day close (LDC), and the objective 2026 yearly open. A breach / daily close above this threshold is needed to invalidate the multi-month downtrend and suggest a more significant low is in place. Subsequent resistance is eyed at the May 25th swing high at 1.3509 with the next major technical consideration eyed at the 61.8% retracement of the yearly range and the 2025 May & August swing highs at 1.3591/93. Look for larger reaction there IF reached.
Initial support rests with the May low / low close 1.3302/26. Note that the 75% parallel of the downslope converges on this level into the close of the week and losses below this threshold would validate a break of the multi-week uptrend and threaten resumption of the broader May downtrend. Subsequent support rests with the 61.8% retracement at 1.3260 and the March low close / 38.2% retracement of the 2025 advance at 1.3187/94.
Bottom line: Sterling is attempting to breakout of a multi-month downtrend with a breakout of the weekly opening-range supporting the rally today. From a trading standpoint, losses would need to be limited to the 200-day moving average near ~1.3397 IF price is heading higher on this stretch with daily close above 1.3474 needed to fuel the next leg of the advance.
Keep in mind we get still get the release of U.S. retail sales and Michigan consumer sentiment into the close of the week. Key U.K. data hits next week with the May employment report and the consumer price index (CPI)on tap. Stay nimble into the release and watch the weekly close here for directional guidance. Review my latest British Pound Weekly Forecast for a closer look at the longer-term GBP/USD technical trade levels.
Key GBP/USD Economic Data Releases
Active Short-term Technical Charts
US Dollar Short-term Outlook: USD Uptrend Faces Make-or-Break Test After CPI Euro Short-term Outlook: EUR/USD Coils Above Critical Support- Decision Time Gold Price Short-term Outlook: XAU/USD Bulls Try to Carve Out a Low After 30% Drop Canadian Dollar Short-term Outlook: USD/CAD Coils Below Resistance—Breakout Looms Australian Dollar Outlook: AUD/USD Holds Major Support—Reversal Risk Builds Swiss Franc Short-term Outlook: USD/CHF Overbought Rally Tests Major Resistance Japanese Yen Short-term Outlook: USD/JPY Breakout Stalls at 2024 High as Intervention Risk Builds --- Written by Michael Boutros, Senior Technical Strategist
The British Pound (GBP) is up 0.1% at around 1.3403 against the US Dollar (USD) during the European trading session on Wednesday. The GBP/USD pair gains as the US Dollar comes under selling pressure, with market participants dialing down expectations for Federal Reserve (Fed) interest rate hikes.
In the European trade, the US Dollar Index (DXY), which tracks the Greenback’s value against six major currencies, has recovered its early losses and is marginally down to near 100.87. However, the DXY is still holding Tuesday’s losses. Read more...
GBP/USD awaits political news: What will happen nextGBP/USD rose to 1.3403 on Wednesday, with British politics taking centre stage for investors.
The market is assessing the upcoming change of prime minister, with Andy Burnham set to take office on 20 July. Of additional interest is the potential candidate for the new Chancellor of the Exchequer. In betting markets, Ed Miliband is considered the favourite, whom investors perceive as a supporter of more active fiscal spending. Read more...
The British Pound (GBP) is up 0.1% at around 1.3403 against the US Dollar (USD) during the European trading session on Wednesday. The GBP/USD pair gains as the US Dollar comes under selling pressure, with market participants dialing down expectations for Federal Reserve (Fed) interest rate hikes.
In the European trade, the US Dollar Index (DXY), which tracks the Greenback’s value against six major currencies, has recovered its early losses and is marginally down to near 100.87. However, the DXY is still holding Tuesday’s losses.
According to the CME FedWatch tool, the odds of the Fed raising interest rates in the policy meeting this month have eased to 16.6% from 41.7% recorded on Monday.
Traders pare hawkish Fed bets as the United States (US) Consumer Price Index (CPI) report for June showed on Tuesday that both headline and core inflation grew at a slower-than-expected pace.
In the United Kingdom (UK), Andy Burnham is set to replace Prime Minister (PM) Keir Starmer on July 20 and will likely appoint a new Finance Minister (FM). The smooth UK leadership transition is supporting the British Pound.
GBP/USD technical analysis
GBP/USD trades slightly higher at around 1.3400, holding a mildly bullish near‑term bias as it remains above the 20‑period exponential moving average (EMA) at 1.3350. However, the overall trend appears sideways amid the Descending Triangle formation.
The Relative Strength Index (RSI) at 55.93 suggests steady, but not overextended, upside momentum.
On the downside, initial support is seen at the current price area around 1.3401, with the 20‑period EMA at 1.3350 reinforcing a nearby demand zone before the structural floor defined by the rising trend‑line break near 1.3166. On the topside, a sustained move above 1.3520, where the descending resistance trend line break level resides, would be needed to open the door for a more decisive bullish extension beyond the recent range. Above 1.3520, the pair could extend its advance towards 1.3600.
(The technical analysis of this story was written with the help of an AI tool. Know more.)
Inflation FAQs Inflation measures the rise in the price of a representative basket of goods and services. Headline inflation is usually expressed as a percentage change on a month-on-month (MoM) and year-on-year (YoY) basis. Core inflation excludes more volatile elements such as food and fuel which can fluctuate because of geopolitical and seasonal factors. Core inflation is the figure economists focus on and is the level targeted by central banks, which are mandated to keep inflation at a manageable level, usually around 2%.
The Consumer Price Index (CPI) measures the change in prices of a basket of goods and services over a period of time. It is usually expressed as a percentage change on a month-on-month (MoM) and year-on-year (YoY) basis. Core CPI is the figure targeted by central banks as it excludes volatile food and fuel inputs. When Core CPI rises above 2% it usually results in higher interest rates and vice versa when it falls below 2%. Since higher interest rates are positive for a currency, higher inflation usually results in a stronger currency. The opposite is true when inflation falls.
Although it may seem counter-intuitive, high inflation in a country pushes up the value of its currency and vice versa for lower inflation. This is because the central bank will normally raise interest rates to combat the higher inflation, which attract more global capital inflows from investors looking for a lucrative place to park their money.
Formerly, Gold was the asset investors turned to in times of high inflation because it preserved its value, and whilst investors will often still buy Gold for its safe-haven properties in times of extreme market turmoil, this is not the case most of the time. This is because when inflation is high, central banks will put up interest rates to combat it. Higher interest rates are negative for Gold because they increase the opportunity-cost of holding Gold vis-a-vis an interest-bearing asset or placing the money in a cash deposit account. On the flipside, lower inflation tends to be positive for Gold as it brings interest rates down, making the bright metal a more viable investment alternative.
GBP/USD rose to 1.3403 on Wednesday, with British politics taking centre stage for investors.
The market is assessing the upcoming change of prime minister, with Andy Burnham set to take office on 20 July. Of additional interest is the potential candidate for the new Chancellor of the Exchequer. In betting markets, Ed Miliband is considered the favourite, whom investors perceive as a supporter of more active fiscal spending.
At the same time, market participants are monitoring escalating tensions in the Middle East, rising oil prices, and increased inflation risks. The United States has continued its strikes on Iran following Donald Trump’s restoration of a naval blockade on Iranian shipping and his proposal for a 20% fee to cover the costs of securing the Strait of Hormuz.
Against this backdrop, markets have strengthened expectations of further rate hikes from the Bank of England. Investors are now almost fully pricing in two rate increases in 2026, with a September hike already largely reflected in quotes.
In the US, weaker-than-expected inflation data for June has eased pressure on the Federal Reserve. However, Christopher Waller warned that the regulator could tighten policy again if inflation remains above the 2% target.
Technical Analysis
On the H4 GBP/USD chart, the market is shaping a growth wave towards 1.3451. A wide consolidation range is practically forming around the 1.3393 level. An upside breakout from this range would open potential for the wave to continue to 1.3453. A downside breakout would suggest the potential for the wave to continue to 1.3333, with the prospect of the trend extending to 1.3090. Technically, this scenario is confirmed by the MACD indicator, whose signal line is above the zero level and pointing strictly downwards.
On the H1 chart, the market has formed a compact consolidation range around the 1.3400 level, currently extending down to 1.3370. An increase to 1.3451 is expected, followed by a decline to 1.3330. Technically, this scenario is confirmed by the Stochastic oscillator, with its signal line below the 80 level and pointing strictly downwards to 20.
Conclusion GBP/USD has edged higher as markets focus on the upcoming UK political transition, with Andy Burnham set to become prime minister on 20 July. The potential appointment of Ed Miliband as Chancellor-seen as favouring more active fiscal spending-adds an element of intrigue. Meanwhile, geopolitical tensions in the Middle East, including renewed US strikes on Iran and a proposed 20% fee for securing the Strait of Hormuz, have pushed oil prices higher and reinforced Bank of England tightening expectations. Markets are now pricing in two rate hikes for 2026, with September already priced in. In the US, softer inflation data has eased pressure on the Fed, though officials remain vigilant. Technically, the pound may see further upside towards 1.3451 before a potential pullback, with the broader direction hinging on UK political developments and geopolitical risks.
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US Dollar News: Softer Inflation Reshapes Fed Outlook The evolving monetary policies, particularly with the release of June’s inflation numbers in the United States, are causing shifts in the value of the dollar, sterling and the euro. U.S. annual inflation for July fell to 3.5% from June’s 4.2%, with core inflation also falling, to 2.6%. This caused a rapid decrease in the projected likelihood of a July 28-29 Federal Reserve interest rate hike. Demand for U.S. futures implied only a 10% likelihood of a July hike. Earlier estimates placed U.S. interest rate hikes at a 35% probability, indicating the bulk of interest rate conjecture has moved to September.
The euro has risen in value with speculation that the European Central Bank will keep the deposit rate at 2.25% and also Curb inflation and growth in the euro region.
The pound also remains strong as it is expected the Bank of England will continue to err on the side of caution. U.K. inflation has also been little influenced by renewed Middle Eastern conflict. Governor Andrew Bailey remains focused on other economic data.
US Dollar Index Technical Analysis: Is DXY Building Momentum for a Move Toward $101.22? Dollar Index Price Chart – Source: Tradingview The US Dollar Index (DXY) is hovering around the 100.88 mark, consolidating above the 0.50 Fibonacci retracement at $100.59 and the 50 EMA at $100.23. The 100 EMA at $99.66 is helping the uptrend. The last few DXY candlesticks display small bodies showing consolidation below $101.22, right after the bullish breakout from the previous descending triangle. $100.88 is the 0.382 Fibonacci level and is providing immediate support, while resistance sits at $101.22 and $101.79 respectively.
The RSI is at approximately 53, above the midpoint, and is showing a decrease in bullish momentum, but the uptrend is still there. As long as we observe DXY above $100.59, we can expect another attempt to reach $101.22, but if that fails, we may see $99.85.
GBP/USD Technical Analysis: Can the Rising Channel Extend the Rally Above $1.3450? GBP/USD Price Chart – Source: Tradingview GBP/USD is currently trading around 1.3405 and stays well within the confines of a rising channel on the 4 hour time frame. Price is above both the 50 EMA at 1.3370 and the 100 EMA at 1.3340 indicates that traders are still dominating the buying side of the market. Recent rejections of the 1.3400 support level have resulted in the formation of higher lows along the rising channel line. The most immediate resistance is found at 1.3453, while 1.3508 is a secondary resistance level.
The most significant support level is at 1.3342. The RSI is at 56 and indicates a bullish market, while the RSI is not at the overbought zone. Based on this market analysis I will be looking for buying opportunities above the 1.3400 level, the target being 1.3453 and with a break below the 1.3342 level the buy side market structure will be broken and this will be an indication of potential reversal in the market.
EUR/USD Technical Analysis: Will the Symmetrical Triangle Trigger the Next Breakout? EUR/USD Price Chart – Source: Tradingview EUR/USD is priced at 1.1423 and is forming a symmetrical triangle on the 4-H chart. The price is around the 50 EMA at 1.1420 but is below the 100 EMA at 1.1435. This shows that buyers and sellers have not taken control of the market. The latest candlesticks show small bodies and long wicks suggesting indecision as the triangle’s apex is approached.
The first nearby resistance is at 1.1461, and the first nearby support is at 1.1412, then 1.1379. The RSI is at 51 and shows no market pressure, which supports consolidation. Given this analysis, I would prefer to see a confirmed breakout beyond 1.1461 with targets set at 1.1493. However, if the price closed below 1.1412, the target would be 1.1379.
United Overseas Bank’s Quek Ser Leang and Lee Sue Ann highlight that GBP/USD’s late-month advance has stalled, with the pair rebounding to 1.3442 before closing at 1.3387. Intraday, the British Pound (GBP) is expected to trade between 1.3360 and 1.3430. Over 1-3 weeks, they maintain a neutral stance, looking for range-trading between 1.3320 and 1.3445, while longer-term supports sit at 1.3210 and 1.3160.
Pound-Dollar trapped in sideways band"24-HOUR VIEW: After GBP declined as we expected two days ago, we highlighted yesterday that “there is scope for GBP to dip below 1.3340 and test 1.3320.” We added, “to keep the momentum going, GBP must hold below 1.3390.” Our view was incorrect, as after dipping to a low of 1.3346, GBP jumped during the NY session, reaching a high of 1.3442. GBP pulled back sharply from the high to close at 1.3387 (+0.31%). Despite the sharp advance, there has been no clear increase in upward momentum. The current price movements are likely part of a range-trading phase, probably between 1.3360 and 1.3430."
"1-3 WEEKS VIEW: Two days ago (13 Jul, spot at 1.3375), we highlighted that “the GBP advance from late last month has ended.” We added, “for the time being, we expect GBP to trade in a range between 1.3320 and 1.3445.” Although GBP rose near the top of our expected range yesterday with a high of 1.3442, it retreated quickly from the high. There has been no shift in momentum indicators, and we continue to expect GBP to trade in a range between 1.3320 and 1.3445."
(This article was created with the help of an Artificial Intelligence tool and reviewed by an editor. Know more.)
The Pound to Dollar (GBP/USD) exchange rate rallied on Tuesday after softer-than-expected US inflation data prompted investors to scale back expectations for another Federal Reserve interest rate hike.
At the time of writing, GBP/USD was trading around $1.3411, up approximately 0.5% on the day.
Latest — Exchange Rates:
Pound to Dollar (GBP/USD): 1.338178 (+0.24%)
Euro to Dollar (EUR/USD): 1.142849 (+0.40%)
Dollar to Yen (USD/JPY): 162.13999 (-0.17%)
DAILY RECAP:
A clear US Dollar (USD) selling bias emerged on Tuesday after the latest US consumer price index showed inflationary pressures eased by more than expected last month.
June's Consumer Price Index reported that headline inflation slowed from 4.2% to 3.5% year-on-year, comfortably below forecasts for a more modest easing to 3.8%. Core inflation also undershot expectations, with annual core CPI easing to 2.6%.
In response, financial markets trimmed some of their more hawkish policy expectations for the Federal Reserve, with the odds for a September interest rate hike falling from around 70% to 50%.
Meanwhile, the Pound (GBP) found support during Tuesday's session as investors doubled down on bets that the Bank of England (BoE) will have to raise borrowing costs again.
The hawkish shift in market sentiment stems from a fresh spike in global energy markets. With conflict flaring up once more in the Gulf, the vital Strait of Hormuz shipping lane has been blocked, raising fears of a renewed inflation shock that could force the BoE’s hand before 2026 draws to a close.
Even so, Sterling's rally was tempered by cautious commentary from the head of the BoE.
Appearing before the Treasury Select Committee, BoE Governor Andrew Bailey struck a sober tone. He pointed out that the geopolitical unrest in the Middle East poses a serious threat to financial stability, while simultaneously reminding lawmakers that Britain's sluggish economic growth remains a heavy drag on the domestic outlook.
Near-Term GBP/USD Forecast: US Producer Prices in Focus Looking ahead, the next catalyst of movement for the Pound to US Dollar (GBP/USD) exchange rate will be the publication of the latest US producer price index on Wednesday.
A cooling in factory gate prices could weigh on the ‘Greenback’ in midweek trade, as we could see a further trimming of Fed rate-hike bets if there are further signs that US inflationary pressures are easing.
Meanwhile, movement in the Pound looks set to remain limited on Wednesday amid a lull in UK data ahead of Thursday’s GDP release.
British Pound advances as US Dollar remains subdued following inflation dataGBP/USD rises for the second consecutive day, trading around 1.3400 during the Asian hours on Wednesday. The pair appreciates as the US Dollar (USD) holds losses following softer-than-expected US inflation data, fueling hopes that the US Federal Reserve (Fed) might adopt a less hawkish monetary stance.
The US Consumer Price Index (CPI) inflation eased to 3.5% year-over-year in June, dropping from a three-year high of 4.2% in May and coming in well below the market consensus of 3.8%. On a monthly basis, headline CPI actually declined by 0.4% in June, a notable shift from the 0.5% increase recorded in May. Read more...
British Pound gains traction above 1.3400 as softer US CPI dampens Fed rate hike expectationsThe GBP/USD pair gains ground to near 1.3405 during the early Asian session on Wednesday. The US dollar (USD) weakens against the British Pound (GBP) as softer-than-expected US inflation in June tempered expectations for US Federal Reserve (Fed) policy tightening. The release of the US June Producer Price Index (PPI) report will be in the spotlight later in the day.
US inflation slowed more than expected in June, with the US Consumer Price Index (CPI) rising by 3.5% YoY in June, compared to 4.2% in May, the US Bureau of Labor Statistics (BLS) showed on Tuesday. This figure came in cooler than the expectation of 3.8%. On a monthly basis, the headline CPI declined by 0.4% in June, versus a rise of 0.5% prior. Read more...
The softest US inflation print in six years buys British Pound Sterling about four hoursCable trades just beneath the 1.3400 handle late in Tuesday's session, pinned under a 200-day Exponential Moving Average (EMA) that sits a few pips shy of the figure and has capped every recovery attempt for two weeks. The softest US inflation report in six years landed at 12:30 GMT; the pair spiked to within a few pips of 1.3450 and has since handed the entire move back.
Tuesday's rejection carries more weight than one headline normally earns: the bounce from early July's trough near 1.3150 has run directly into the falling 200-day average, the daily Stochastic Relative Strength Index is stretched above 80, and Sterling must now explain why the best inflation news the Dollar could hand it was worth roughly four hours of gains. Read more...
GBP/USD started a fresh increase above 1.3300 and 1.3350. A key bullish trend line is forming with support at 1.3370 on the 4-hour chart. Gold struggled near $4,120 and corrected some gains. WTI Crude Oil prices gained pace for a move above $80.00. GBP/USD Technical Analysis The British Pound remained in a positive zone above 1.3320 against the US Dollar. GBP/USD corrected some gains from 1.3450, but the bulls protected losses.
Looking at the 4-hour chart, the pair tested the 38.2% Fibonacci retracement level of the upward move from the 1.3140 swing low to the 1.3451 high. Besides, the pair remained stable above the 100 simple moving average (red, 4-hour) and the 200 simple moving average (green, 4-hour).
The pair is again rising above 1.3400. On the upside, the bears might remain active near 1.3435 and 1.3450. The next major resistance might be 1.3500.
A close above 1.3500 could start a steady increase. In the stated case, the bulls could aim for a move to 1.3620. If there is a fresh decline, the pair might find support near 1.3370. There is also a key bullish trend line forming with support at 1.3370.
The first major support could be near 1.3300 and the 100 simple moving average (red, 4-hour). A downside break and close below 1.3300 might send the pair toward the 50% Fibonacci retracement level at 1.3260. Any more losses could open the doors for a test of 1.3200.
Looking at EUR/USD, the pair recovered some losses, but the bears are still active near the 1.1475 resistance zone.
Upcoming Key Economic Events:
US Producer Price Index for June 2026 (MoM) – Forecast 0%, versus +1.1% previous. US Producer Price Index for June 2026 (YoY) – Forecast +6.2%, versus +6.5% previous. Fed’s Cook speech. Fed’s Beige Book.
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The British Pound (GBP) strengthens against the US Dollar (USD) on Tuesday after US inflation data surprised to the downside, reducing expectations of a near-term Federal Reserve (Fed) interest rate hike. At the time of writing, GBP/USD trades around 1.3415, up nearly 0.50% on the day and hovering near a one-month high. Read More...
GBP/USD Price Forecast: Pound holds above 1.3350 with the 200-day SMA capping gainsThe British Pound (GBP) appreciates against the US Dollar (USD) on Tuesday to trim previous losses and return to the 1.3375 area, aiming to retest resistance at the key 200-day Simple Moving Average (SMA). This is a popular indicator, which lies a few pips below 1.3400 and has been capping Pound’s recovery over the last two weeks. Read More...
British Pound drifts higher to near 1.3350 ahead US CPI dataThe GBP/USD pair gains ground to around 1.3355 during the early European trading hours on Tuesday. The British Pound (GBP) strengthens against the US Dollar (USD) as traders have ramped up bets that the Bank of England (BoE) will be forced to raise interest rates this year to keep inflation under control. Read More...
U.S. Dollar Pulls Back As Inflation Rate Misses Estimates
DXY 140726 4h Chart U.S. Dollar Index is losing ground as traders react to CPI report. The report indicated that Inflation Rate decreased from 4.2% in May to 3.5% in June, compared to analyst forecast of +3.8%. Core Inflation Rate pulled back from 2.9% to 2.6%, while analysts expected that it would drop to 2.8%.
Lower-than-expected inflation data put material pressure on the American currency as traders reduced bets on hawkish Fed. However, the strong rally in the oil markets may raise prices again, so it remains to be seen whether the pullback in inflation is sustainable.
The nearest support level for U.S. Dollar Index is located in the 100.50 – 100.65 range. In case U.S. Dollar Index manages to settle below the 100.50 level, it will head towards the next support, which is located in the 99.75 – 99.90 range.
EUR/USD Tests Resistance At 1.1420 – 1.1435 EUR/USD 140726 4h Chart EUR/USD moved higher as traders focused on U.S. inflation data. In the EU, traders had a chance to take a look at the Wholesale Prices report from Germany. The report indicated that Wholesale Prices declined by -0.7% month-over-month in June, compared to analyst forecast of +0.5%.
From the technical point of view, EUR/USD continues its attempts to settle above the resistance level at 1.1420 – 1.1435. In case EUR/USD climbs above the 1.1435 level, it will head towards the next resistance at 1.1500 – 1.1515. RSI remains in the moderate territory, so there is plenty of room to gain momentum in case the right catalysts emerge.
GBP/USD Moves Higher As Traders Reduce Bets On Hawkish Fed GBP/USD 140726 4h Chart GBP/USD gained ground, supported by U.S. CPI report. Traders bet that Fed will be less hawkish as inflation has started to calm down. Traders also focus on comments from Fed Chair Warsh. He said that CPI decline did not mean that Fed accomplished its mission.
In case GBP/USD pulls back below the 50 MA at 1.3376, it will head towards the nearest support level at 1.3335 – 1.3350. A successful test of of this level will open the way to the test of the next support at 1.3250 – 1.3265.
On the upside, GBP/USD needs to settle above the resistance at 1.3450 – 1.3465 to have a chance to gain additional upside momentum in the near term.
USD/CAD Tests New Lows
USD/CAD 140726 4h Chart USD/CAD is losing ground as lower-than-expected U.S. CPI data provided material support to commodity markets. Other commodity-related currencies are also moving higher in today’s trading session.
USD/CAD settled below the previous support at 1.4125 – 1.4140 and is trying to settle below the 1.4050 level. In case this attempt is successful, it will head towards the next support at 1.4000 – 1.4025.
USD/JPY Moves Lower As Treasury Yields Fall USD/JPY 140726 4h Chart USD/JPY is losing some ground as traders focus on the pullback in Treasury yields. The yield of 2-year Treasuries declined towards the 4.20% level, while the yield of 10-year Treasuries settled below 4.60%.
A move below the support level at 161.50 – 162.00 will push USD/JPY towards recent lows near the 160.50 level. It should be noted that USD/JPY failed to gain strong downside momentum as traders worried that rising oil prices will put pressure on Japan’s economy.
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/ / British Pound Technical Outlook: GBP/USD Recovery Vulnerable at Major Resistance GBP/USD is approaching major resistance early in the month - can the bulls charge the break?
14/07/2026
7/14/2026 12:23:00 PM
British Pound Technical Outlook: GBP/USD Multi-Timeframe Analysis British pound, GBP/USD and U.S. inflation are back in focus as Sterling struggles to extend its recovery. Michael Boutros, Senior Market Analyst at FOREX.com, examines the key technical levels that could determine the next move for GBP/USD, explains why resistance remains intact, and discusses how upcoming U.S. CPI, PPI and retail sales data could shape the outlook for the U.S. dollar and Sterling in the days ahead.
This content was created by an affiliate of FOREX.com and represents the views and opinions of the author/speakers, not the views and opinions of Forex.com, StoneX Group Inc., or its subsidiaries. The content has not been independently reviewed by FOREX.com.
Key US Economic Data Releases
Economic Calendar - latest economic developments and upcoming event risk.
Active Short-term Technical Charts Euro Short-term Outlook: EUR/USD Coils Above Critical Support- Decision Time Gold Price Short-term Outlook: XAU/USD Bulls Try to Carve Out a Low After 30% Drop Canadian Dollar Short-term Outlook: USD/CAD Coils Below Resistance—Breakout Looms Australian Dollar Outlook: AUD/USD Holds Major Support—Reversal Risk Builds Swiss Franc Short-term Outlook: USD/CHF Overbought Rally Tests Major Resistance Japanese Yen Short-term Outlook: USD/JPY Breakout Stalls at 2024 High as Intervention Risk Builds British Pound Short-term Outlook: GBP/USD Rebound Challenges Bear Trend Written by Michael Boutros, Senior Technical Strategist
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The British Pound (GBP) appreciates against the US Dollar (USD) on Tuesday to trim previous losses and return to the 1.3375 area, aiming to retest resistance at the key 200-day Simple Moving Average (SMA). This is a popular indicator, which lies a few pips below 1.3400 and has been capping Pound’s recovery over the last two weeks.
Markets are hesitant on Tuesday with the US Dollar a tad lower as investors await the release of US Consumer Prices Index (CPI) figures, which are expected to show a slight moderation in prices, yet at levels well above the Federal Reserve’s (Fed) 2% rate. After that Fed Chairman Kevin Warsh will face the first of the two hearings before the US Congress scheduled for this week.
The Pound has been holding a positive trend since Prime Minister Keir Starmer resigned in late June. Investors are confident that Andrew Burnham, the best-positioned candidate to replace him, will respect Chancellor Reeves' fiscal rules.
Technical Analysis: Key resistance is at the 1.3400 area
GBP/USD trades at 1.3378. The pair broke the downtrend resistance line from May highs but remains capped below the 200-day simple moving average (SMA) at 1.3397. Momentum indicators in the daily chart are neutral-to-bullish with the Relative Strength Index (RSI) hovering just above 50 and the Moving Average Convergence Divergence (MACD) in positive territory.
The mentioned 200-day SMA around 1.3397, however, is likely to be a tough nut to crack. If that level is broken, the June 15 and July 10 high, near 1.3455, will be targeted. On the downside, the floor of the last two weeks' trading range, at 1.3330, is likely to challenge bears. Further down, the broken trendline, now at 1.3290, and the June 22 and 30 highs around 1.3270 emerge as the next targets.
(The technical analysis of this story was written with the help of an AI tool. Know more.)
Pound Sterling 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.
USDEURGBPJPYCADAUDNZDCHFUSD-0.18%-0.26%-0.18%-0.52%-0.50%-0.97%-0.35%EUR0.18%-0.08%0.02%-0.35%-0.33%-0.79%-0.17%GBP0.26%0.08%0.11%-0.25%-0.23%-0.71%-0.09%JPY0.18%-0.02%-0.11%-0.35%-0.35%-0.82%-0.21%CAD0.52%0.35%0.25%0.35%0.00%-0.45%0.17%AUD0.50%0.33%0.23%0.35%-0.01%-0.47%0.18%NZD0.97%0.79%0.71%0.82%0.45%0.47%0.62%CHF0.35%0.17%0.09%0.21%-0.17%-0.18%-0.62% 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).
The Pound to Dollar (GBP/USD) exchange rate dipped at the start of the week as renewed tensions in the Middle East briefly boosted demand for the safe-haven US Dollar before Sterling recovered some ground.
At the time of writing, GBP/USD was trading at $1.3391, having rebounded from an overnight low of $1.3369.
Latest — Exchange Rates:
Pound to Dollar (GBP/USD): 1.337846 (-0.20%)
Euro to Dollar (EUR/USD): 1.13997 (-0.13%)
Dollar to Yen (USD/JPY): 162.32053 (+0.38%)
DAILY RECAP:
The US Dollar (USD) initially rose as this week’s trade began, following fresh clashes in the Middle East.
Although fighting briefly subsided on Friday, tensions flared again over the weekend after Iran targeted a container vessel in the Strait of Hormuz. The US responded with strikes against Iranian positions, prompting Tehran to retaliate by launching attacks on US-aligned Gulf states.
Investors are becoming increasingly wary that the conflict could escalate further, dampening hopes that the two sides could negotiate a lasting peace agreement.
A risk-off mood as trade began on Monday lifted the safe-haven US Dollar, although USD struggled to hold its gains as market risk sentiment showed some resilience.
Meanwhile, the Pound (GBP) traded without clear direction on Monday as the absence of any notable UK economic releases offered investors little impetus.
However, Sterling managed to limit losses against the US Dollar, supported by continued optimism over the UK's political outlook. Investors remained hopeful that the prolonged period of political uncertainty weighing on the Pound was beginning to fade.
This helped GBP recoup some of its initial losses against USD.
Near-Term GBP/USD Forecast: US Inflation to Dent the US Dollar? Looking forward, the ‘Greenback’ could face headwinds on Tuesday with the publication of the latest US consumer price index.
Markets expect inflation to have cooled from 4.2% in May to 3.8% in June. If the CPI prints as forecast, USD could come under pressure.
However, events in the Middle East are also likely to drive movement. The ‘Greenback’ could enjoy safe-haven flows if tensions remain fraught.
Meanwhile, GBP investors will focus on a speech from Bank of England (BoE) Governor Andrew Bailey on Tuesday.
Bailey has recently maintained a measured stance, suggesting policymakers should monitor inflation developments before making any changes to interest rates. However, with renewed US-Iran tensions pushing global energy prices higher, Sterling could strengthen if his remarks signal a firmer commitment to keeping monetary policy restrictive.
United Overseas Bank’s Quek Ser Leang and Lee Sue Ann highlight that GBP/USD gapped lower, dropping to 1.3343 and closing at 1.3346 as the Dollar firmed. Short‑term momentum has cooled, but they still see scope for a dip toward 1.3320, while the broader view has turned neutral, with Sterling expected to trade between 1.3320 and 1.3445 in coming sessions.
Sterling shifts to neutral range view"24-HOUR VIEW: GBP closed at 1.3402 last Friday, but it gapped lower on the open yesterday. When it was at 1.3375, we indicated that “the rapid increase in momentum suggests GBP could break below 1.3360.” We also indicated that “the next support at 1.3340 is likely out of reach.” We were not wrong, as GBP broke below 1.3360 and dropped to a low of 1.3343. Despite the decline, downward momentum has not increased significantly. However, there is scope for GBP to dip below 1.3340 and test 1.3320. Based on the prevailing momentum, a clear break below 1.3320 appears unlikely. To keep the momentum going, GBP must hold below 1.3390, with minor resistance at 1.3375"
"1-3 WEEKS VIEW: Yesterday (13 Jul, spot at 1.3375), we revised our view from positive to neutral. We highlighted that “the GBP advance from late last month has ended.” We added, “for the time being, we expect GBP to trade in a range between 1.3320 and 1.3445.” While we did not quite expect the subsequent sharp decline to 1.3343, we will continue to hold the same view for now. Looking ahead, should GBP break below 1.3320, it could trigger a deeper pullback."
(This article was created with the help of an Artificial Intelligence tool and reviewed by an editor. Know more.)
British Pound strengthens above 1.3350 ahead of US CPI dataThe GBP/USD pair trades in positive territory around 1.3360 during the Asian trading hours on Tuesday. However, the potential upside for the major pair might be limited amid fears of an escalating US-Iran conflict. The US June Consumer Price Index (CPI) inflation report will take center stage later on Tuesday.
US President Donald Trump said on Monday that Washington was reinstating a naval blockade on Tehran and would ensure the Strait of Hormuz remained open for a fee following fresh exchanges of missile and drone strikes, per Reuters. The US military said that US forces completed new strikes on Iranian military targets, adding that more than 50,000 US service members are currently deployed across the Middle East. Read more...
British Pound Sterling buckles as Trump builds the Hormuz toll booth he swore would never existThe British Pound Sterling is spending Monday learning the difference between a recovery and a reprieve. GBP/USD opened the week flush against its 200-day Exponential Moving Average (EMA), probed the 1.3400 area through the Asian hours, and has been sold methodically ever since; the pair now changes hands at 1.3349, leaning on the 1.3350 shelf with the session low a few pips beneath.
Little of the damage is native to Sterling, because the Dollar is being bought against the entire major-currency board on two stories that landed within hours of each other. The first turns the world's most important Crude Oil chokepoint into a toll plaza; the second comes from a Federal Reserve (Fed) official who spent last year arguing for cuts and now warns about hikes. Read more...
Dollar Index Price Chart – Source: Tradingview DXY holds $101.20, with the daily chart showing mixed candlestick retesting of the Fibonacci 0.618 level at $100.31 after a strong breakout from the $97.67 swing low. Bullish candles are making higher highs with the price staying above the 50-period EMA at $100.21, signaling buyers’ control.
The RSI, though still near neutral at 60, is biased to the upside. The volume profile is also showing $101.00 to 101.50 as the breakout zone. In the coming weeks, the technical analysis suggests a target near $103.09.
Since the price is holding above $100.31, the technical structure remains strongly bullish. As the chart is in an uptrend, the price is making higher highs and higher lows in a channel. My plan is to buy above $101.20 targeting $103.09, with a stop loss at $100.31.
The Pound Sterling begins the week on a lower note, as over-the-weekend developments in the Middle East fueled inflationary pressures due to the rise in Oil prices. At the time of writing, the GBP/USD trades at 1.3369, down over 0.20%. Read More...
British Pound remains subdued as US-Iran tensions lift US DollarGBP/USD remains in negative territory after paring daily losses, trading around 1.3390 during the early European hours on Monday. The pair faces challenges as the US Dollar (USD) gains ground on rising safe-haven demand amid intensifying tensions in the Middle East. Read More...
British Pound remains depressed below 1.3400 as escalating US-Iran tensions underpin USDThe GBP/USD pair finds some support near 1.3370 after a modest gap-down opening on Monday, though it lacks bullish conviction and remains below 1.3400. Nevertheless, spot prices, for now, seem to have stalled the pullback from a nearly four-week high, around the 1.3450 area, touched on Friday amid mixed fundamental cues. Read More...
Key Points:EUR/USD pulled back as traders reacted to the strong rally in the oil markets. USD/CAD was mostly flat as traders focused on the pullback in precious metals markets. USD/JPY climbed towards the 162.50 level amid rising Treasury yields.
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U.S. Dollar Gains Ground As Oil Prices Rally
DXY 130726 4h Chart U.S. Dollar Index gains ground as traders focus on geopolitical developments. President Trump said that U.S. will impose a naval blockade on Iranian ports. He added that U.S. will become a “guardian” in the Strait of Hormuz and would charge fees at a rate of 20% on all cargo shipped.
Currently, U.S. Dollar Index is trying to settle above the resistance level at 101.15 – 101.30. In case this attempt is successful, U.S. Dollar Index will move towards the next resistance level, which is located in the 101.80 – 101.95 range.
EUR/USD Retreats As Traders Bet On Hawkish Fed
EUR/USD 130726 4h Chart EUR/USD pulled back as traders focused on the strong rally in the oil markets. Brent oil gained 5% as the flow of oil through the Strait of Hormuz would drop after U.S. decision to impose a naval blockade on Iran. Most likely, Iran will try to attack vessels passing through the Strait without the country’s permission.
EUR/USD failed to settle above the resistance at 1.1420 – 1.1435 and pulled back towards the 1.1400 level. If EUR/USD manages to settle below the 1.1400 level, it will head towards the nearest support, which is located in the 1.1350 – 1.1365 range. RSI is in the moderate territory, so there is plenty of room to gain additional downside momentum in case the right catalysts emerge.
GBP/USD Pulls Back Amid Rising Geopolitical Tensions GBP/USD 130726 4h Chart GBP/USD moved lower as traders worried that rising oil prices will force the Fed to raise rates sooner rather than later, which would be bullish for the American currency.
In case GBP/USD declines below the 50 MA at 1.3366, it will get to the test of the support at 1.3335 – 1.3350. A move below the 1.3335 level will open the way to the test of the next support level at 1.3250 – 1.3265.
USD/CAD Remains Stuck Near Support At 1.4125 – 1.4140 USD/CAD 130726 4h Chart USD/CAD continued its attempts to settle below the support at 1.4125 – 1.4140 despite the strong pullback in precious metals markets. Gold declined towards the psychologically important $4000 level, while silver pulled back below $58.00. Other commodity-related currencies were mixed in today’s trading session.
If USD/CAD settles below the 1.4125 level, it will move towards the support level at 1.4010 – 1.4025. On the upside, USD/CAD needs to stay above the 1.4140 level to have a chance to gain upside momentum in the near term. In this case, USD/CAD will head towards the 50 MA at 1.4185. A move above the 50 MA will push USD/CAD towards the resistance at 1.4225 – 1.4240.
USD/JPY Gains Ground As Treasury Yields Rise
USD/JPY 130726 4h Chart USD/JPY is moving higher as traders focus on rising Treasury yields. The yield of 2-year Treasuries moved above the 4.25% level, while the yield of 10-year Treasuries settled above 4.60%.
If USD/JPY stays above the support level at 161.50 – 162.00, it will move towards recent highs near the 162.80 level. In case USD/JPY manages to settle above 162.80, it will gain additional upside momentum and head towards the 165.00 level. It remains to be seen whether Bank of Japan is ready to provide support to the Japanese yen.
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Vladimir is an independent trader, with over 18 years of experience in the financial markets. His expertise spans a wide range of instruments like stocks, futures, forex, indices, and commodities, forecasting both long-term and short-term market movements.
GBP/USD Price Forecast: Bounces back to near 1.3400 as US Dollar turns upside downThe British Pound (GBP) recovers its early losses and flattens around 1.3400 against the US Dollar (USD) during the European trading session on Monday. The GBP/USD pair bounces back as the US Dollar surrenders its opening gains and turns negative amid hopes that renewed hostilities between the United States (US) and Iran won’t be prolonged.
In the late European trade, the US Dollar Index (DXY), which gauges the Greenback’s value against six major currencies, trades 0.1% lower at around 100.85. Read more...
British Pound remains subdued as US-Iran tensions lift US DollarGBP/USD remains in negative territory after paring daily losses, trading around 1.3390 during the early European hours on Monday. The pair faces challenges as the US Dollar (USD) gains ground on rising safe-haven demand amid intensifying tensions in the Middle East.
US Central Command (CENTCOM) launched additional airstrikes on Sunday evening, following striking more than 300 Iranian targets over a three-night span, including 140 on Saturday. The purpose is to neutralize Iran's capability to target civilian vessels navigating critical waterways. This military escalation has left Washington and Tehran issuing conflicting declarations regarding whether the strategic strait remains open to maritime traffic. Read more...
British Pound remains depressed below 1.3400 as escalating US-Iran tensions underpin USDThe GBP/USD pair finds some support near 1.3370 after a modest gap-down opening on Monday, though it lacks bullish conviction and remains below 1.3400. Nevertheless, spot prices, for now, seem to have stalled the pullback from a nearly four-week high, around the 1.3450 area, touched on Friday amid mixed fundamental cues.
Former Greater Manchester mayor Andy Burnham secured the support of the vast majority of Labour MPs to replace Keir Starmer and become Britain's next prime minister, calming concerns about political instability. This, along with bets for at least one 25-basis-point (bps) interest rate hike from the Bank of England by the end of 2026, lends some support to the British Pound (GBP). However, escalating US-Iran tensions benefit the safe-haven US Dollar (USD) and might keep a lid on any further upside for the GBP/USD pair. Read more...
