The 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.
The table below shows the percentage change of US Dollar (USD) against listed major currencies today. US Dollar was the weakest against the New Zealand Dollar.
USDEURGBPJPYCADAUDNZDCHFUSD-0.10%0.09%0.26%-0.16%0.14%-0.34%0.07%EUR0.10%0.20%0.35%-0.06%0.25%-0.20%0.19%GBP-0.09%-0.20%0.17%-0.25%0.08%-0.38%0.04%JPY-0.26%-0.35%-0.17%-0.43%-0.13%-0.58%-0.14%CAD0.16%0.06%0.25%0.43%0.31%-0.12%0.29%AUD-0.14%-0.25%-0.08%0.13%-0.31%-0.41%0.00%NZD0.34%0.20%0.38%0.58%0.12%0.41%0.43%CHF-0.07%-0.19%-0.04%0.14%-0.29%-0.01%-0.43% 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 US Dollar from the left column and move along the horizontal line to the Japanese Yen, the percentage change displayed in the box will represent USD (base)/JPY (quote).
During the day, a spokesperson from the Iranian Foreign Ministry confirmed that efforts from Qatar, Oman and Pakistan to mediate tensions with the United States (US) are continuing, while accusing Washington of violating the memorandum of understanding (MoU) terms.
Meanwhile, military aggression between the US and Iran continues as Iran's Mehr News Agency stated during the European trade that several explosions were heard around Iran's Bandar Abbas and Qeshm island. However, the news has not been confirmed by major media outlets.
Going forward, investors will focus on the US Consumer Price Index (CPI) data for June and the United Kingdom (UK) monthly Gross Domestic Product (GDP) data for May, which are scheduled for Tuesday and Thursday, respectively.
GBP/USD technical analysis
GBP/USD trades calmly near 1.3400. The pair holds a modest bullish bias as spot trades above the 20-day exponential moving average (EMA) at 1.3344, but the overall trend appears sideways amid the Descending Triangle formation.
The Relative Strength Index (RSI) at roughly 55 leans to the topside but remains shy of overbought territory, hinting at constructive yet not overstretched momentum.
On the topside, initial resistance emerges at the downward resistance trend line break price near 1.3528, and a daily close above this barrier would open the way for a more sustained advance. On the downside, immediate support is provided by the 20-day EMA at 1.3344, and a drop back below this moving average would ease the current bullish tone and expose deeper pullbacks toward the June 30 low at 1.3212.
(The technical analysis of this story was written with the help of an AI tool. Know more.)
Economic Indicator Gross Domestic Product (MoM) The Gross Domestic Product (GDP), released by the Office for National Statistics on a monthly and quarterly basis, is a measure of the total value of all goods and services produced in the UK during a given period. The GDP is considered as the main measure of UK economic activity. The MoM reading compares economic activity in the reference month to the previous month. Generally, a rise in this indicator is bullish for the Pound Sterling (GBP), while a low reading is seen as bearish.
The GBP/USD pair retreated from a multi-week peak of 1.3452 toward following a sudden flare-up of US-Iran conflict The escalating geopolitical risk revived global safe-haven demand for the US dollar and pushed crude oil prices sharply higher While near-term technicals point to range-bound consolidation, the medium-term path remains tied to UK GDP growth and central bank divergence. The GBP/USD pair reached a high of approximately 1.3452 last week, its strongest performance since mid-June, driven by increased economic optimism in the UK. However, this upward trend paused at the start of the new trading week.
Geopolitical tensions between the United States and Iran, specifically concerning shipping lanes in the Middle East, caused a significant market reaction. This led to a decline in the GBP/USD pair, bringing it back to around 1.3383 and raising concerns about the durability of sterling’s recent gains.
How Did We Get Here? Sterling’s upward movement last week was primarily influenced by expectations regarding the Bank of England’s monetary policy. Market participants have factored in at least one interest rate increase anticipated for later in 2026, with a possibility of a second, reflecting ongoing inflation concerns. Additionally, political transitions, including the recent resignation of Keir Starmer and the expected leadership of Andy Burnham, contributed to a more stable market sentiment.
However, market sentiment has recently shifted. The weekend saw significant missile and drone exchanges between US and Iranian forces. Reports indicate that Iran launched attacks on American installations in the Gulf and potentially closed the Strait of Hormuz.
This development led to a jump in Brent crude prices of around 3-4% as trading commenced in Asia. According to Reuters, this combination of rising oil prices and inflation fears, coupled with a move towards safe-haven assets, strengthened the US dollar globally.
During periods of heightened military tension, the US dollar typically serves as a primary safe-haven asset. This often prompts institutional investors and corporate treasuries to quickly reallocate capital away from riskier assets and into more liquid U.S. Treasury securities.
The Dollar Has The Upper Hand In The Near-Term In the near term, the GBP/USD exchange rate will probably see some selling, and the pair will likely be range-bound. While the geopolitical situation is causing some choppiness now, it probably won’t change the overall direction for the long term. Typically, during these kinds of crises, investors flock to the dollar for safety. However, this effect usually doesn’t last if tensions ease or talks begin again.
Looking further ahead, though, this conflict probably won’t drastically change the bigger economic picture. The British pound is in a stronger position than it was in past years. The UK economy has shown consistently positive surprises in its data, and the upcoming GDP numbers are expected to show a good recovery.
How Should Investors Position Themselves? Investors should be careful right now. If you hold British pound assets, you might want to consider protecting yourself against the dollar getting stronger, perhaps by using options or spreading out your currency holdings.
For traders, a more sensible move is to see dips as opportunities to buy rather than signs of a major downturn. While at it, be sure to pay close attention to the Consumer Price Index (CPI) report coming out on Tuesday. Also, keep an eye out for any indications that the Strait of Hormuz might be disrupted for a long time, as that would be a real threat to this outlook.
Currencies Reflect Divergent Monetary Policies and Economic Fundamentals On July 13, the dollar, euro and pound will keep being defined by competing central bank stances and economic fundamentals. Latest FOMC meeting minutes saw a hint of a shift towards the hawkish side with some officials thinking rates might well be firmed up on the back of core inflation being too sticky, while risks from energy price volatility, and demand from artificial intelligence. The dollar is thus supported by the prospect of relatively restrictive monetary policy being sustained for a period of time. Strong underlying domestic demand and a status quo as a global reserve currency are key structural positives for the dollar.
Economy-wide growth across the euro zone is currently uneven, and is likely to remain so in the months following the ECB’s June rate increase to 2.25%. Different fiscal positions at the country level and heterogeneous inflation dynamics are key factors influencing monetary policy transmission in the euro zone. The euro currency remains susceptible to activity and wage data.
Sterling is facing a similar dilemma, as policymakers at the Bank of England juggle elevated service-sector inflation risks against signs of softer economic growth. Domestic fiscal and labour market policies are likely to continue playing a key role in the currency’s outlook as relative policy stances with the Fed and the ECB impact on exchange rates.
Key economic fundamentals remain divergent, with different paths in inflation dynamics, fiscal settings and underlying growth resilience, all of which will sustain two-way market risks for the three major currencies. External trade flows and capital movements will further differentiate the currency markets depending on which central bank can most easily maintain stability and growth.
DXY Holds $101.07 – Fib 0.618 Retest on 4h Dollar Index Price Chart – Source: Tradingview The USD index (DXY) was up slightly at $101.07 on the 4h timeframe chart. We can see from the 4h DXY chart that the mixed candles had just tested 0.618 Fib level near 100.31 after a strong breakout from the swing low at 97.67.
The bullish bodies with higher highs are confirming the buyer’s control, while still maintaining respect for the 4h chart 50-EMA near 101.02. We can also observe that the RSI sits near 55. Meanwhile, the volume profile identifies 100.59-101.06 as a significant breakout point.
Fib retracement implies the next resistance will come around 103.09 in the next few weeks. In short, the market remains decisively bullish in the 4h chart above 100.59 inside a well-defined ascending channel, confirming a higher high and a higher low formation to keep the buyers firmly in control.
Based on this technical outlook, I would consider a long position around $101.07, targeting $103.09, while placing a stop below $100.59.
GBP/USD Holds $1.3388 – EMA 50 Defense on 4h
GBP/USD Price Chart – Source: Tradingview The British pound was trading near $1.3388 on the 4h timeframe chart. The mixed candles defending the 4h chart 50-EMA near 1.3360 were kicked off near the red MA around 1.337, according to the 4h GBP/USD price chart.
The bullish wicks represent buyers’ absorption around support levels, confirming higher lows are still in tact. The RSI sits near 51. The volume profile identifies 1.331-1.338 as a reliable pivot. We note that the resistance is located around 1.345-1.350.
The GBP/USD is maintaining a neutral-to-bearish structure at the 4h 1.345 EMA-50 as the price oscillates inside a sideways trading range. The higher lows indicate that the buyers remain on the sidelines, looking to buy at any pullback.
Based on the current technical outlook, I would consider a long position around 1.3388, targeting 1.345, with a stop below 1.325.
EUR/USD Holds $1.1440 – EMA 50 Defense on 4h EUR/USD Price Chart – Source: Tradingview The euro (EURUSD) was trading near $1.1440 on the 4h timeframe chart. The 4h EUR/USD chart shows that the mixed candles are defending the 4h chart 50-EMA near $1.1423 after the bears were kicked off near the $1.162 red MA. We see that the bullish wicks represent buyers’ absorption near support levels while the higher lows are being held on the 4h EUR/USD.
The RSI sits near 43. The volume profile confirms a reliable pivot around 1.140-1.150. The next resistance is located around 1.155-1.162. The EUR/USD price action remains neutral-bearish near the 1.150 EMA-50 on the 4h timeframe chart as the price trades inside the long-term downtrend. Higher lows keep the buyers engaged, as they enter at any dips in this zone.
Based on the current technical outlook, I would consider a long position around 1.1440, targeting 1.155, with a stop below 1.140.
UOB’s Quek Ser Leang and Lee Sue Ann note that GBP/USD gapped lower after briefly breaking above 1.3445, with momentum turning down and risks of a test below 1.3360, though 1.3320 is seen as distant for now. They judge that the advance from late last month has ended and expects a 1.3320–1.3445 range in coming weeks, with broader 1.3210–1.3655 levels on a 1–3 month view.
Pound advance seen losing steam"24-HOUR VIEW: Last Friday, when GBP was at 1.3410, we indicated that “there is a chance for GBP to test the major resistance at 1.3445.” However, we were of the view that “a clear break above this level is unlikely.” We added, “support is at 1.3390.” While GBP rose more than expected to 1.3452, it then staged a sharp retreat to 1.3392 before closing largely unchanged at 1.3402 (-0.05%). Today, GBP gapped lower on the open. The rapid increase in momentum suggests GBP could break below 1.3360. The next support at 1.3320 is likely out of reach. Resistance is at 1.3390; a breach of 1.3410 would mean the immediate downward pressure has faded."
"1-3 WEEKS VIEW: We have held a positive GBP view since late last month (see annotations in the chart below). Last Thursday (09 Jul, spot at 1.3390), we highlighted that “while the risk remains on the upside, given that there has been no further increase in upward momentum, it is left to be seen if GBP can reach 1.3445.” After GBP rose to 1.3430, we highlighted on Friday (10 Jul, spot at 1.3410) that “upward momentum has strengthened somewhat, and should GBP break above 1.3445, the next level to watch is 1.3480.” The subsequent price movements did not quite turn out as expected. GBP broke above 1.3445 and printed a high of 1.3452 before dropping sharply. It continued to decline today. Although our ‘strong support’ level at 1.3360 has not been breached yet, upward momentum has largely faded. To put it another way, the GBP advance from late last month has ended, and for the time being, we 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 climbed over the past week, briefly reaching a three-week high as Sterling remained well supported despite renewed geopolitical tensions in the Middle East.
At the time of writing, GBP/USD was trading at $1.3417, up around 0.5% on the week.
Latest — Exchange Rates:
Pound to Dollar (GBP/USD): 1.338855 (-0.13%)
Euro to Dollar (EUR/USD): 1.140619 (-0.08%)
Dollar to Yen (USD/JPY): 161.71495 (+0.01%)
DAILY RECAP:
The US Dollar (USD) traded unevenly last week as renewed tensions in the Middle East created periods of safe-haven demand, although the currency struggled to hold onto its gains for long.
The 'Greenback' opened the week on a mixed footing, briefly finding support as US markets reopened after the Independence Day holiday before retreating as improving risk appetite reduced demand for the safe-haven currency.
Fresh attacks on commercial shipping in the Strait of Hormuz then boosted USD on Tuesday, as fears of a wider regional conflict prompted investors to seek safer assets.
However, the US Dollar lost momentum in the second half of the week. Despite escalating US-Iran tensions, resilient market sentiment limited demand for the safe-haven currency, while the Federal Reserve's latest meeting minutes offered little fresh policy guidance.
USD briefly fell to a three-week low against the Pound on Friday, although it recovered some ground before the close as trading remained volatile.
Meanwhile, the Pound (GBP) continued to strengthen over the past week as traders further reduced the political risk premium attached to Sterling following Prime Minister Keir Starmer’s resignation three weeks ago.
Sterling’s strong performance highlights the extent to which prolonged political uncertainty had been holding back the UK currency. With Andy Burnham now widely expected to replace Starmer through a smooth transition of power, confidence in the UK’s political outlook has continued to improve, providing additional support for the Pound.
The Pound also benefited from rising expectations that the Bank of England (BoE) will increase interest rates. Escalating tensions in the Middle East pushed oil prices higher, leading markets to price in a greater chance of another BoE rate hike.
Near-Term GBP/USD Forecast: UK GDP and US CPI in Focus Looking ahead, the spotlight for Pound investors this week will be Thursday’s UK GDP release. Economists expect the British economy to have returned to growth in May, with a modest 0.1% expansion forecast, which may provide Sterling with some support.
That said, the GDP figures are only likely to trigger a more pronounced reaction if they come in notably above or below expectations, potentially prompting sharp moves in the Pound.
Politics may also remain on investors’ radar. Andy Burnham could be officially confirmed as Labour leader on Friday if no other valid candidates enter the race. A smooth and orderly handover is likely to be viewed positively by markets, which could offer additional support to Sterling.
Meanwhile, the focus for USD investors will be the latest US consumer price index on Tuesday. If inflation cooled in June, as expected, the ‘Greenback’ could drop.
That said, fresh tensions in the Middle East could sour the market mood and lift USD.
Cable moves within a narrow-range sideways mode for the second consecutive day, after 1% advance last week that completed reversal pattern on weekly chart (after the downleg from 1.3869 was contained by ascending trendline, drawn off 1.0348, 2022 low) and generated positive signal on close above weekly Ichimoku cloud top (1.3335).
On the other side, the picture on daily chart is not that optimistic (14-d momentum remains in negative territory and turns south, stochastic is emerging from overbought territory) as long upper shadows on last two daily candles point to strong headwinds from very significant 1.3400 resistance zone (consisting of converged 200/100/55DMAs / 50% retracement of 1.3653/1.3140 / daily cloud base).
The second consecutive daily Doji candle signals strong indecision and risk of further hesitation and possible recovery stall on approach to pivotal 1.3400 resistance zone.
More likely scenario in the near term would be dips towards 1.3300 zone (psychological / 20DMA) which needs to contain dips and keep in play hopes for fresh acceleration higher and possible attack at 1.3400 zone barriers.
Conversely, firm break of 1.3300 handle would further weaken near-term structure and risk deeper drop.
The information contained in this document was obtained from sources believed to be reliable, but its accuracy or completeness cannot be guaranteed. Any opinions expressed herein are in good faith, but are subject to change without notice. No liability accepted whatsoever for any direct or consequential loss arising from the use of this document.
The Pound Sterling (GBP) holds firm on Friday during the North American session as risk appetite deteriorated after US President Donald Trump posted on social media that the ceasefire with Iran is over, even though negotiations continue. At the time of writing, the GBP/USD pair trades at 1.3406, unchanged, after reaching an almost one-month high of 1.3451 earlier in the day. Read More...
British Pound surrenders early gains as US Dollar regains groundThe British Pound (GBP) gives back its early gains and turns almost flat around 1.3410 against the US Dollar (USD) during the European trading session on Friday. The GBP/USD pair falls back as the US Dollar regains ground amid fears that the restart of the war between the United States (US) and Iran would last long. Read More...
British Pound gains traction above 1.3400 as markets bet on BoE rate hikesThe GBP/USD pair gathers strength to around 1.3430 during the Asian trading hours on Friday. The British Pound (GBP) edges higher against the US Dollar (USD) on the UK government leadership transition and growing expectations of further Bank of England (BoE) interest rate hikes. Read More...
GBP/USD 100726 4h Chart GBP/USD is moving higher as traders bet that the situation in the Middle East will calm down. In absence of economic reports, geopolitical developments serve as the key catalyst for GBP/USD. In case U.S. and Iran restart negotiations and do not attack each other, demand for risk assets will increase, providing additional support to the British pound.
The nearest resistance level for GBP/USD is located in the 1.3450 – 1.3465 range. If GBP/USD manages to settle above the 1.3465 level, it will head towards the next resistance level, which is located in the 1.3535 – 1.3550 range.
On the support side, GBP/USD needs to settle below the 1.3400 level to have a chance to gain downside momentum in the near term. A move below 1.3400 will push GBP/USD towards the support level at 1.3335 – 1.3350.
British Pound Technical Forecast: GBP/USD Weekly Trade Levels GBP/USD has nearly erased the latest decline after rebounding sharply from key support at the yearly low. The recovery is once again approaching the same resistance zone that rejected Sterling last month - the near-term advance remains vulnerable while below. A sustained breakout would invalidate the recent downtrend and strengthen the case for a larger trend reversal while failure would keep the broader range intact. U.S. inflation data next week could provide the catalyst for the next major move in Sterling. Resistance 1.3460/74 (key), 1.3591, 1.3648/85- Support 1.3326, 1.3194/99 (key), 1.3092 The battle for control of GBP/USD is shifting back to a familiar battleground. After recovering sharply from support at the yearly lows, Sterling is once again confronting the yearly open and a major Fibonacci resistance zone that rejected price just weeks ago. The coming sessions should help determine whether buyers can finally force a meaningful breakout or if this latest recovery proves to be another counter-trend rally within the broader range. With U.S. inflation data looming next week, the macro backdrop may provide the catalyst for the next major move. Battle lines drawn on the GBP/USD weekly technical chart.
Review my latest Weekly Strategy Webinar for an in-depth breakdown of this Sterling setup and more. Join live on Monday’s at 8:30am EST.
British Pound Price Chart – GBP/USD Weekly
Chart Prepared by Michael Boutros, Sr. Technical Strategist; GBP/USD on TradingView
Technical Outlook: In last month’s British Pound Weekly Forecast we noted that the Sterling recovery had stretched into pivotal resistance at the 2026 yearly open, “and marks the first test for the bulls.” GBP/USD reversed sharply off resistance later that week with the decline extending more than 2.5% off the June highs. Price rebounded into the close of the month off lateral support at the 38.2% retracement of the 2025 advance with a two-week rally nearly erasing the entire decline. Sterling is once again trading into pivotal resistance at the 61.8% retracement of the May decline and the objective yearly open at 1.3460/73. The focus is on possible inflection off this threshold with the multi-week advance vulnerable while below.
Initial weekly support rests with the May low close at 1.3326 and is backed by the 38.2% retracement and the 2026 low-week close (LWC) at 1.3194/99. Note that a break / weekly close below this threshold would constitute a breakout of the yearly opening range and threaten the next major leg of the decline. Subsequent support rests with the 2026 high-week close (HWC) at 1.3092.
A breach / weekly close above this key pivot zone would invalidate the May downtrend and fuel a larger recovery within the yearly range. The next technical considerations beyond this level are eyed with the 61.8% retracement of the yearly range at 1.3591 and the 2025 & 2026 high week closes (HWC) at 1.3648/84- look for a larger reaction there IF reached.
Bottom line: The Sterling rally is now approaching pivotal Fibonacci resistance into the yearly open- risk for price inflection into this zone in the weeks ahead. Watch the weekly close today with respect to the 52-week moving average (currently ~1.3406) for guidance. From a trading standpoint, a good zone to reduce long-exposure / raise protective stops – the immediate focus is on a breakout of the 1.3326-1.3474 range for guidance with the near-term long-bias vulnerable below the yearly open.
The UK economic docket is rather light over the next few days with the U.S. June CPI & PPI data highlighting event risk next week. Stay nimble into the releases and respect the weekly close. Review my latest British Pound Short-term Outlook for a closer look at the near-term GBP/USD technical trade levels.
GBP/USD Economic Data Releases
Economic Calendar - latest economic developments and upcoming event risk.
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The euro has also been struggling to navigate mixed economic activity throughout the Eurozone, and in addition, the ECB is trying to achieve price stability. As countries continue to have varying fiscal positions and inflation rates, they are impacting the way that monetary policy affects each country differently. For the euro, that translates into being vulnerable to data releases on economic activity and wage increases.
Sterling faces the same challenge of balancing between the Bank of England’s concerns over services inflation and the economy’s slowing pace. In the UK, there continues to be domestic fiscal policy and labor markets that will remain important factors in the pound’s performance. On top of that, policy decisions of the other two central banks will impact the currency pair prices.
These currencies’ fundamentals reflect that their divergence is going to remain intact for some time to come. Inflation levels, fiscal policy choices, and economic growth vary from country to country in terms of pace and resilience. As a result, two-way risks remain prevalent in these currencies and will persist. These countries’ differences will play out in the currencies’ trade balances and capital movements, in addition to the central banks’ capabilities to stabilize growth.
According to UOB’s Quek Ser Leang, GBP/USD’s sharp rebound has left scope to test major resistance at 1.3445, though a clear break is seen as unlikely in the near term. Short-term support lies at 1.3390 and 1.3360. Over one to three weeks, strengthened momentum could open 1.3480 if 1.3445 gives way, while broader ranges dominate over months.
Pound testing key resistance band"24-HOUR VIEW: GBP fell to 1.3315 on Wednesday and then rebounded strongly. When GBP was at 1.3390 in the early Asian session yesterday, we highlighted that “the sharp rebound appears to be overdone, but there is a chance for GBP to test 1.3420 before the risk of a pullback increases.” We added, “the major resistance at 1.3445 is unlikely to come into view.” GBP then rose to 1.3430, pulled back to 1.3381 before moving back up to close at 1.3409 (+0.14%). While there has been no clear increase in upward momentum, there is a chance for GBP to test the major resistance at 1.3445. A clear break above this level is unlikely. Support is at 1.3390."
"1-3 WEEKS VIEW: Tracking our positive GBP view from late last month, we highlighted yesterday (09 Jul, spot at 1.3390) that “while the risk remains on the upside, given that there has been no further increase in upward momentum, it is left to be seen if GBP can reach 1.3445.” GBP subsequently rose to a high of 1.3430. Upward momentum has strengthened somewhat, and should GBP break above 1.3445, the next level to watch is 1.3480. On the downside, a breach of 1.3360 (‘strong support’ level was at 1.3315 yesterday) would indicate that GBP is not advancing further."
(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 traded around 1.3431 on Friday, extending its recovery to fresh one-year highs as Sterling continued to outperform while the US Dollar remained under pressure.
Latest — Exchange Rates:
Pound to Dollar (GBP/USD): 1.343026 (+0.13%)
Euro to Dollar (EUR/USD): 1.144055 (+0.07%)
Dollar to Yen (USD/JPY): 161.53132 (-0.52%)
DAILY RECAP:
GBP/USD climbed for a third consecutive session, with the pair moving above 1.34 after briefly dipping below 1.3350 earlier in the week.
Sterling has continued to benefit from a combination of easing political uncertainty and expectations that the Bank of England will remain cautious over the pace of future rate cuts.
Recent UK data has been mixed, but inflation remains above target and investors continue to believe policymakers will be reluctant to ease policy aggressively.
In its latest FX briefing, ING argued that Sterling is increasingly taking its direction from domestic developments rather than simply following moves in global bond markets.
The US Dollar, meanwhile, has struggled to regain momentum.
Although the Federal Reserve minutes showed policymakers remain divided over the outlook for interest rates, investors have become less convinced that US rates will move materially higher this year. Broader risk appetite has also improved following a tentative easing in Middle East tensions, reducing demand for traditional safe-haven assets.
MUFG said in its latest market commentary that the Dollar remains vulnerable while positioning continues to unwind and investors rotate back into higher-beta currencies.
Scotiabank also highlighted that recent Dollar weakness has been driven more by changing market positioning than by any fundamental deterioration in the US economy.
With Sterling finding domestic support and the Dollar losing some of its defensive appeal, GBP/USD has reached its highest levels since last summer.
Near-Term GBP/USD Forecast: UK Activity Data and Fed Speakers in Focus For Pound Sterling, with nothing on the calendar for Friday, attention will turn to next Tuesday's final first-quarter UK GDP estimate, together with manufacturing production, industrial production and trade balance figures.
Investors will also be listening closely to comments from Bank of England policymakers for any fresh clues on the timing of future rate cuts.
For the US Dollar, markets will focus on Federal Reserve speakers, including policymakers due to speak after the release of the latest FOMC minutes, alongside US CPI inflation expectations and consumer sentiment updates later in the week.
Investors will also continue to monitor developments in the Middle East after the recent ceasefire reduced some of the geopolitical risk premium.
If UK economic data remains resilient while the Dollar stays under pressure, GBP/USD could extend towards "dense resistance ahead of 1.3500."
However, stronger US data or a renewed flight to safety could pull the pair back towards 1.3300.
According to Shaun Osborne, Chief FX Strategist at Scotiabank, "the GBP’s recovery is looking even more entrenched as it stages its first meaningful attempt at breaking above recent resistance around 1.3400 and levels that roughly correspond to the 50 and 200 day MA’s.
"The offers dense resistance ahead of 1.3500.
"We note the continued recovery in the RSI, climbing to the upper 50s.
"We look to a near-term range bound between 1.3350 and 1.3450."
The GBP/USD pair trades in positive territory around 1.3430 during the early European trading hours on Friday. The UK government leadership transition and growing expectations of further Bank of England (BoE) interest rate hikes underpin the British Pound (GBP) against the US Dollar (USD).
Andy Burnham’s path to becoming the next UK prime minister looks certain after a vast majority of Labour MPs formally nominated him to be the next party leader. Bloomberg reported on Thursday that 322 of 403 Labour members of Parliament voted for Burnham at the end of the first day of the party’s leadership contest to replace Keir Starmer. Burnham is expected to formally become Prime Minister on July 20.
Traders have ramped up bets on the BoE interest rate hikes amid escalating tensions between the US and Iran. Markets are now fully pricing in a 25 basis points (bps) BoE rate increase by year-end, most likely in December, according to Reuters.
Technical Analysis:In the daily chart, GBP/USD holds a modest bullish bias as it sits above the 100-day simple moving average (SMA) and the Bollinger Bands’ 20-day SMA. The pair is edging higher toward the upper Bollinger band, while the 14-day Relative Strength Index hovers just below the 60 mark, suggesting firm but not overstretched upside momentum as price grinds higher within the broader range.
On the topside, initial resistance aligns with the upper Bollinger band near 1.3475, and a daily close above this cap would open the way for the April 15 high of 1.3579. On the downside, immediate support is seen at the 100-day SMA at 1.3405. A deeper pullback would expose the Bollinger midline near 1.3305, while the lower band around 1.3130 marks a more distant floor guarding the broader uptrend structure.
(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.
British Pound: Recovery tests key resistance against US Dollar – ScotiabankScotiabank strategists Shaun Osborne and Eric Theoret report the British Pound (GBP) is fractionally higher versus the US Dollar (USD), with sentiment improving after PM Starmer’s resignation announcement. They see support from a repriced Bank of England (BoE) rate path following the latest Oil rally and describe GBP/USD’s recovery as increasingly entrenched as it attempts to break above 1.3400 and trades within a 1.3350–1.3450 range.
"The pound is up fractionally vs. the USD and is a mid-performer among the G10 currencies as we head into Thursday’s NA session with focus still largely centered on broader developments in the absence of high-level domestic releases." Read more...
British Pound elevates despite firm US claimsGBP/USD trades higher near the 1.3400 area on Thursday, as the US Dollar (USD) fails to find support from stronger-than-expected United States (US) jobless claims data and hawkish signals in the latest Federal Open Market Committee (FOMC) Minutes.
United States (US) Initial Jobless Claims fell to 215K, below expectations of 218K and the previous revised 217K, while the four-week average eased to 218.75K from 222.5K. However, Continuing Jobless Claims rose slightly to 1.814 million from 1.806 million, suggesting that while layoffs remain limited, workers are still taking longer to find new jobs. Read more...
British Pound hits fresh three-week highs past 1.3400 as US Dollar pulls backThe British Pound (GBP) appreciates against the US Dollar (USD) for the second consecutive day on Thursday, to hit fresh three–week highs right above 1.3400. The Greenback's pullback following the release of the Federal Reserve’s (Fed) minutes and rumours about the resumption of the US-Iran negotiations are keeping the pair buoyed.
The US and Iran traded attacks for the second consecutive day on Thursday, but risk aversion remains contained so far, with markets hopeful that the negotiations will continue. US President Donald Trump affirmed earlier on Thursday that Tehran “wants to make a deal so badly,” which suggests that the peace talks might resume soon. Read more...
Scotiabank strategists Shaun Osborne and Eric Theoret report the British Pound (GBP) is fractionally higher versus the US Dollar (USD), with sentiment improving after PM Starmer’s resignation announcement. They see support from a repriced Bank of England (BoE) rate path following the latest Oil rally and describe GBP/USD’s recovery as increasingly entrenched as it attempts to break above 1.3400 and trades within a 1.3350–1.3450 range.
Pound sentiment improves on policy repricing"The pound is up fractionally vs. the USD and is a mid-performer among the G10 currencies as we head into Thursday’s NA session with focus still largely centered on broader developments in the absence of high-level domestic releases."
"The recent recovery in sentiment remains important, signaling market confidence in the aftermath of PM Starmer’s June 22 resignation announcement."
"Fundamentally, the outlook for relative central bank policy is providing additional support as markets reprice the BoE’s rate path in light of the latest rally in oil prices."
"Neutral/bullish—the GBP’s recovery is looking even more entrenched as it stages its first meaningful attempt at breaking above recent resistance around 1.3400 and levels that roughly correspond to the 50 and 200 day MA’s."
"We look to a near-term range bound between 1.3350 and 1.3450."
(This article was created with the help of an Artificial Intelligence tool and reviewed by an editor. Know more.)
The pound has ben strengthening all week, and despite a renewed flare-up in geopolitical tensions between the US and Iran, which pushed crude oil prices sharply higher, the cable has barely flinched. But if the situation deteriorates, and oil prices remain elevated for longer, this will prompt investors to reassess the outlook for US monetary policy, which, in turn, could negatively impact the GBP/USD forecast. For now, side-ways trading is likely to dominate the agenda, with the US dollar likely to find dip buyers ahead of US CPI next week.
While the reaction in foreign exchange has so far been relatively restrained compared with moves in energy markets, the implications for monetary policy are becoming increasingly difficult to ignore. Higher oil prices threaten to slow the disinflation process that has underpinned expectations for easier central bank policy this year. If energy prices remain elevated, the Federal Reserve may find itself keeping interest rates higher for longer, and perhaps deliver some rate hikes later this year.
That remains supportive for the US dollar, particularly against currencies where domestic fundamentals are becoming less convincing.
Not much for US dollar until CPI release next week With little fresh guidance from the minutes of the FOMC’s June meeting, attention now shifts to next week’s US CPI report and Fed Chair Kevin Warsh’s testimony before Congress. Both events have the potential to reshape expectations for the remainder of the year. Against a backdrop of firmer energy prices, the balance of risks arguably favours a more hawkish interpretation of incoming inflation data, which should continue to provide underlying support for the greenback. Today’s US jobless claims data pointed to a healthy jobs market.
GBP/USD forecast: Political uncertainty could cap sterling’s recovery Sterling has been one of the stronger-performing major currencies in recent weeks, helped in part by the immediate reduction of uncertainty about Keir Starmer after he stepped down. But this doesn’t mean political uncertainty is over. Far from it. Attention is gradually shifting towards the expected change in UK leadership later this month. Investors will be watching closely for the appointment of the next Chancellor, particularly given growing speculation that fiscal policy could take a more expansionary direction.
The challenge for any incoming government is that public finances remain under considerable strain. With limited room for additional spending without raising taxes, expectations for meaningful fiscal stimulus may ultimately prove difficult to deliver.
At the same time, markets are no longer expecting the Bank of England to tighten policy further this year. That leaves sterling increasingly reliant on external factors, particularly oil prices and developments in the US dollar, rather than domestic monetary support.
Technical GBP/USD forecast: Cable reaches 200-day MA Source: TradingView.com From a technical analysis perspective, the GBP/USD forecast continues to favour the downside despite the impressive gains it has made in the last couple of weeks. If we see a sharp reversal around the point of origin of the last breakdown from around the 1.3400 region, where we also have the 200-day average converging, resulting in the breakdown of the short-term bullish trend line, then a return to support at 1.3270ish could be on the way. Otherwise, a slow drift towards 1.3500 could be the outcome if oil falls back.
Looking ahead, a stronger-than-expected US inflation report next week could accelerate downside momentum by reinforcing expectations that the Federal Reserve will maintain a restrictive policy stance. Conversely, any easing in Middle East tensions or signs that inflation pressures are once again moderating could allow sterling to recover some lost ground. For now, however, the path of least resistance appears to favour a firmer dollar, leaving the near-term GBP/USD forecast tilted modestly to the downside.
The British currency has also been grappling with services inflation pressures and slower growth rates that the Bank of England has had to consider. Domestic budget spending and employment developments are crucial to the performance of the pound along with relative policy settings that can affect cross-rates with the U.S. and Europe.
Other factors, such as differential inflation paths, fiscal policies, economic growth levels, trade balances, and capital flows, can continue to drive currency valuations. As central banks respond to inflation pressures, their approaches will shape future developments in the FX markets. For now, the FOMC minutes released today, along with the upcoming data, provide additional market intelligence and could be a determining factor in shaping the trend that currencies are expected to move over the short term.
The Pound to Dollar (GBP/USD) exchange rate edged lower on Wednesday as renewed tensions in the Middle East boosted demand for the safe-haven US Dollar.
At the time of writing, GBP/USD was trading at $1.3350, having rebounded from an earlier low of $1.3322 but remaining modestly lower on the day.
Latest — Exchange Rates:
Pound to Dollar (GBP/USD): 1.337215 (+0.20%)
Euro to Dollar (EUR/USD): 1.140248 (+0.02%)
Dollar to Yen (USD/JPY): 162.64579 (+0.18%)
DAILY RECAP:
The US Dollar (USD) ticked higher on Wednesday as tensions in the Middle East continued to escalate.
Following attacks on shipping vessels in the Strait of Hormuz earlier in the week, the US launched retaliatory strikes against Iranian targets and reimposed sanctions on Iran. Tehran also directed attacks at US allies in the region.
Amid these latest clashes, US President Donald Trump said that he considers the memorandum of understanding with Iran ‘over’. However, he also indicated that negotiations could continue.
While an anxious mood prevailed, thereby providing the safe-haven US Dollar with support, lingering hopes that the two sides could continue to pursue peace limited risk aversion.
Meanwhile, the increasingly risk-sensitive Pound (GBP) struggled amid the souring market mood, although losses were limited as investors remained hopeful that the latest tit-for-tat strikes between Washington and Tehran were just a bump in the road.
In addition, the recent fading of political risk in the UK continued to underpin Sterling.
Near-Term GBP/USD Forecast: Fed Minutes in Focus Looking forward, the Federal Reserve will publish its June meeting minutes on Wednesday evening, with USD investors eager for any hints from policymakers about the likelihood and potential timing of interest rate hikes.
If Fed officials struck a broadly hawkish tone at last month’s meeting, the ‘Greenback’ could enjoy support.
On Thursday, the attention shifts to the latest US initial jobless claims figure. A forecast rise in unemployment claims could dent USD.
As for the Pound, nominations for the Labour leadership open on Thursday. If frontrunner Andy Burnham looks likely to be the only one standing, Sterling could enjoy support.
Finally, risk appetite may remain a key factor for GBP/USD, with events in the Middle East potentially driving volatility.
The GBP/USD pair trades in positive territory around 1.3405 during the early European trading hours on Thursday. Fading political uncertainty in the United Kingdom (UK) provides some support to the British Pound (GBP) against the US Dollar (USD).
Following the resignation of Keir Starmer in late June, UK political risk has eased significantly. The formal race to replace outgoing Prime Minister Keir Starmer begins on July 9. Frontrunner Andy Burnham is widely expected to become Prime Minister by July 20.
Technical Analysis:In the daily chart, GBP/USD holds a mildly bullish near-term bias as price sits above the Bollinger middle band and the 100-day simple moving average (SMA). The pair is pressing the upper half of the recent range, with the Bollinger Bands (20, 2) still widening modestly, while the Relative Strength Index (14) at 57.6 suggests constructive but not overextended upside momentum.
On the topside, initial resistance is aligned with the Bollinger upper band at 1.3470, where buyers could hesitate. On the downside, immediate support is provided by the Bollinger middle band near 1.3300, while a deeper pullback would likely be contained by the Bollinger lower band around 1.3130.
(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.
British Pound strengthens to near 1.3400 as UK political risk fadesThe GBP/USD pair gathers strength near 1.3395 during the Asian trading hours on Thursday, bolstered by fading domestic political uncertainty. However, hawkish minutes from the Federal Reserve (Fed) and renewed tensions between the US and Iran might support the US Dollar (USD) and cap the upside for the major pair.
Following the resignation of Keir Starmer in late June, UK political risk has eased significantly, lifting the Cable. The formal race to replace outgoing Prime Minister Keir Starmer begins on July 9. Frontrunner Andy Burnham is widely expected to become Prime Minister by July 20. Read more...
British Pound Sterling wins the day and stays stuck in the same trapGBP/USD trades just below 1.3400 on Wednesday, up around a quarter of a percent and once again leaning on the 200-day Exponential Moving Average (EMA) that has repelled every advance since the pair clawed back from its mid-June washout. Cable has recovered roughly two big figures from the 1.3150 area in under two weeks, and the reward for the effort is a ceiling it cannot break and a floor it refuses to leave.
The Pound's bid is not homegrown: Fresh US strikes on Iran sent Crude Oil surging more than 6% and dragged Bank of England (BoE) tightening expectations up with it. Markets now fully price a 25-basis-point hike by year-end, up from roughly three-quarters odds before President Trump declared the Versailles ceasefire over, and a November move trades better than even. The June hold at 3.75% already carried two dissenters voting for 4.00%, so the hawkish bloc only needs the energy shock to persist, and the Strait of Hormuz is supplying persistence daily. Read more...
The Pound Sterling (GBP) posts modest gains during the North American session on Wednesday amid growing tensions in the Middle East, as US President Donald Trump's said the deal with Iran was “over” after both countries exchanged attacks over the last couple of days. At the time of writing, the GBP/USD pair trades at 1.3371, up 0.09%. Read More...
British Pound slumps against US Dollar as risky assets turn fragileThe British Pound (GBP) is down 0.13% to near 1.3340 against the US Dollar (USD) during the European trading session on Wednesday. The GBP/USD pair faces selling pressure as renewed geopolitical risks have diminished the appeal of riskier assets. Read More...
British Pound declines to near 1.3350 as US launches strikes on IranThe GBP/USD pair loses traction to near 1.3355 during the Asian trading hours on Wednesday. The US Dollar (USD) edges higher against the British Pound (GBP) amid renewed geopolitical tensions after the US renewed strikes on Iran. The Federal Reserve’s (Fed) June meeting minutes will be published later on Wednesday. Read More...
Key Points:EUR/USD pulled back as traders reacted to the strong rally in the oil markets. USD/CAD moved lower despite the pullback in precious metals markets. USD/JPY gained ground, supported by rising Treasury yields.
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U.S. Dollar Moves Higher As Oil Prices Gain 5%
DXY 080726 4h Chart U.S. Dollar Index gains ground as traders prepare for the release of FOMC Minites and react to rising tensions in the Middle East.
President Trump said that U.S. could launch strikes against Iran and resume the blockade of country’s ports. Oil prices are up by more than 5% as traders react to the surprising escalation between U.S. and Iran. Rising oil prices could force Fed to be more hawkish, which is bullish for the American currency.
Currently, U.S. Dollar Index is trying to settle above the resistance at 101.15 – 101.30. In case this attempt is successful, U.S. Dollar Index will head towards the next resistance level, which is located in the 101.80 – 101.95 range. RSI is in the moderate territory, so there is plenty of room to gain momentum in the near term.
EUR/USD Retreats Amid Worries About Hawkish Fed EUR/USD 080726 4h Chart EUR/USD is losing ground as traders focus on the strong rally in the oil markets. Demand for risk assets declined amid inflation fears, which was bearish for the European currency.
EUR/USD settled below the 50 MA at 1.1414 and is trying to settle below the 1.1400 level. If EUR/USD settles below 1.1400, it will head towards the support level, which is located in the 1.1350 – 1.1365 range.
GBP/USD Rebounds From Session Lows GBP/USD 080726 4h Chart GBP/USD is swinging between gains and losses as traders focus on geopolitical tensions and evaluate their next moves.
In case GBP/USD manages to settle above the support level at 1.3335 – 1.3350, it will head towards the next resistance, which is located in the 1.3450 – 1.3465 range.
USD/CAD 080726 4h Chart USD/CAD is losing some ground despite the strong pullback in precious metals markets. Gold is down by -1.5%, while silver pulled back by -4%. Other commodity-related currencies are mixed in today’s trading session.
In case USD/CAD stays below the 50 MA at 1.4203, it will head towards the nearest support level, which is located in the 1.4125 – 1.4140.
On the upside, a move above the 50 MA will push USD/CAD towards the resistance at 1.4225 – 1.4240. In case USD/CAD climbs above the 1.4240 level, it will head towards the next resistance, which is located in the 1.4335 – 1.4350 range.
USD/JPY Gains Ground As Treasury Yields Rise USD/JPY 080726 4h Chart USD/JPY is moving higher as traders focus on rising Treasury yields. The yield of 2-year Treasuries moved above the 4.23% level, while the yield of 10-year Treasuries settled above 4.58%. Treasury yields are rising as traders react to recent developments in the Middle East and bet on hawkish Fed. In case oil prices continue to move higher, the Japanese yen will find itself under additional pressure.
From the technical point of view, USD/JPY settled above the resistance at 161.50 – 162.00 and is moving towards multi-decade highs near 162.80. In case USD/JPY settles above the 162.80 level, it will head towards the 165.00 level. It remains to be seen whether the Bank of Japan is ready to intervene as yen’s fundamentals are extremely bearish. Previous attempts to support the yen yielded no results.
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The British Pound (GBP) is down 0.13% to near 1.3340 against the US Dollar (USD) during the European trading session on Wednesday. The GBP/USD pair faces selling pressure as renewed geopolitical risks have diminished the appeal of riskier assets.
At press time, S&P 500 futures are down almost 1% to near 7,430, demonstrating a risk-off market mood. The US Dollar Index (DXY), which tracks the Greenback’s value against six major currencies, trades marginally higher to near 101.15 after recovering early losses.
Risks of the restart of the Middle East war have forced investors to shift to the safe-haven fleet. In the European trade, United States (US) President Donald Trump said that the “memorandum of understanding (MoU) with Iran is over”, adding that he doesn’t want to deal with them.
This came as Tehran continues to prove its authority over the Strait of Hormuz, a critical chokepoint to almost 20% of the global energy supply, with aggression. On Tuesday, Tehran struck commercial ships passing through the chokepoint, stating that were crossing the passage without approval.
Meanwhile, investors await the Federal Open Market Committee (FOMC) Minutes of the June policy meeting, which will be published at 18:00 GMT. Investors will pay close attention to FOMC minutes to get cues regarding why Fed officials decided to abandon forward guidance.
US Dollar FAQs The US Dollar (USD) is the official currency of the United States of America, and the ‘de facto’ currency of a significant number of other countries where it is found in circulation alongside local notes. It is the most heavily traded currency in the world, accounting for over 88% of all global foreign exchange turnover, or an average of $6.6 trillion in transactions per day, according to data from 2022. Following the second world war, the USD took over from the British Pound as the world’s reserve currency. For most of its history, the US Dollar was backed by Gold, until the Bretton Woods Agreement in 1971 when the Gold Standard went away.
The most important single factor impacting on the value of the US Dollar is monetary policy, which is shaped by the Federal Reserve (Fed). The Fed has two mandates: to achieve price stability (control inflation) and foster full employment. Its primary tool to achieve these two goals is by adjusting interest rates. When prices are rising too quickly and inflation is above the Fed’s 2% target, the Fed will raise rates, which helps the USD value. When inflation falls below 2% or the Unemployment Rate is too high, the Fed may lower interest rates, which weighs on the Greenback.
In extreme situations, the Federal Reserve can also print more Dollars and enact quantitative easing (QE). QE is the process by which the Fed substantially increases the flow of credit in a stuck financial system. It is a non-standard policy measure used when credit has dried up because banks will not lend to each other (out of the fear of counterparty default). It is a last resort when simply lowering interest rates is unlikely to achieve the necessary result. It was the Fed’s weapon of choice to combat the credit crunch that occurred during the Great Financial Crisis in 2008. It involves the Fed printing more Dollars and using them to buy US government bonds predominantly from financial institutions. QE usually leads to a weaker US Dollar.
Quantitative tightening (QT) is the reverse process whereby the Federal Reserve stops buying bonds from financial institutions and does not reinvest the principal from the bonds it holds maturing in new purchases. It is usually positive for the US Dollar.
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The Pound to Dollar (GBP/USD) exchange rate retreated on Tuesday after touching a near three-week high overnight, as renewed geopolitical tensions boosted demand for the safe-haven US Dollar.
At the time of writing, GBP/USD was trading at $1.3371, down from an overnight high of $1.3398.
Latest — Exchange Rates:
Pound to Dollar (GBP/USD): 1.335798 (+0.10%)
Euro to Dollar (EUR/USD): 1.142074 (+0.18%)
Dollar to Yen (USD/JPY): 162.26312 (-0.05%)
DAILY RECAP:
The US Dollar (USD) attracted renewed support on Tuesday, helping it reclaim some of Monday evening’s losses, as fresh tensions in the Middle East weighed on the market mood.
Sentiment deteriorated following attacks in the Strait of Hormuz overnight, with two commercial shipping vessels reportedly struck by projectiles.
The US has said that Iran is responsible for the attacks, with Washington expected to target Iranian sites in retaliation.
The latest escalation in geopolitical tensions sparked a cautious shift across markets, boosting demand for the US Dollar.
Meanwhile, the Pound (GBP) remained supported on Tuesday, with Sterling avoiding heavier losses despite an absence of notable UK economic releases.
GBP has strengthened in recent sessions as domestic political uncertainty continues to fade. Following Prime Minister Keir Starmer’s resignation, several would-be leadership rivals have thrown their support behind frontrunner Andy Burnham.
Investors have welcomed the prospect of a smoother transition, with months of speculation over Starmer’s future and the threat of a disruptive leadership battle now appearing to have passed. Burnham is widely expected to take over as Prime Minister without a contest, while maintaining the government’s existing fiscal framework.
This helped the Pound limit its losses against the US Dollar, even as a risk-off mood weighed on sentiment.
Near-Term GBP/USD Forecast: Fed Minutes to Influence the US Dollar? Looking forward, Wednesday evening brings the publication of the minutes from the Federal Reserve’s June interest rate decision, which could influence the US Dollar. If the minutes reveal an appetite for interest rate increases among Fed policymakers, the ‘Greenback’ could climb.
Elsewhere, market risk appetite could impact the GBP/USD pairing. If tensions escalate in the Middle East, a souring mood could support the safe-haven US Dollar and pressure the increasingly risk-sensitive Pound.
Sterling may remain somewhat supported by the continued unwinding of the political risk premium that had been priced into the Pound. However, with the Labour leadership nominations opening on Thursday, GBP could find itself subdued.
HomeTechnical AnalysisIntraday Analysis 08.07.2026 Gold hits another roadblock
Intraday analysis covering GBPUSD , XAUUSD (The Gold) , and USOIL , highlighting recent price movements, key technical levels, and short-term momentum shifts across major markets.
GBPUSD hits resistance
Cable had a July to remember, with price action jumping over 200 pips since the beginning of the month.
The market mood has remained positive despite a slight retracement after hitting the 1.3400 zone. 1.3340 is needed if a full reversal is to happen, before a move towards the lower region of 1.3300. On the upside, a break above 1.3400 will lead to a continuation towards 1.3460. XAUUSD looking for direction
XAUUSD (The Gold)is looking to continue its trajectory even after hitting some resistance.
As the price now struggles to secure a move past 4150, the recent double bottom around 4120 is a critical floor to stabilise sentiment. A breach at the said level could trigger a round of liquidation, with the psychological level of 4000 as a potential target. If prices can remain above 4120, then 4190 will be on the radar for buyers as sentiment shifts once again. USOIL going nowhere
Oil is stuck and going nowhere since the previous sell-off.
Only a twist in the Middle Eastern tensions would cause a spike in prices, but for now, no news means no movement. Prices remain in consolidation between 68.00 and 70.00 with the RSI slowly creeping into the neutral zone. A break at one of those levels would see the next phase for the black gold as global tensions simmer. 72.50 is a potential target, with 64.00 being a critical support.
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Key Points:Markets are awaiting today’s FOMC meeting minutes for fresh clues on the Fed’s policy stance amid sticky inflation.DXY held at $101.04 with green continuation candles retesting Fibonacci 0.618 level.EUR/USD defended $1.1418 blue trendline support with green rejection candles absorbing selling pressure.GBP/USD held $1.3360 resistance zone, testing key levels with mixed candles and neutral momentum.
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Dollar, Euro and Pound Navigate Divergent Central Bank Paths On July 8, the dollar, euro, and sterling were underpinned by different monetary policy settings and economic conditions. Core inflation has remained elevated in the U.S., meaning the Fed is disinclined to ease rates in any near term, keeping a more hawkish setting and dollar attractive as a reserve currency, alongside a strong economy and fiscal balance sheet.
The euro was hampered by heterogeneous growth across the euro zone as the ECB looks to keep inflation expectations anchored. Divergent fiscal settings and inflation rates in the bloc add to a transmission effect, making the currency more data and wage-dependent.
Sterling is caught between sticky services inflation and weaker growth, with the BoE weighing the labour market data and fiscal policy. The relative policy stance of the Fed, ECB and BoE is likely to continue to underpin cross-rates.
All in all, different inflation trajectories, fiscal positions and economic resiliencies will likely lead to two-way risk in the currencies, with other variables like trade balances and capital flows likely to contribute to currency dispersion.
DXY Holds $101.04 – Fibonacci 0.618 Retest on 4h Dollar Index Price Chart – Source: Tradingview DXY is trading at $101.04 on the 4-hour time frame. The 4-hour candles, which are colored mixed red and green, retested the .618 Fib level at $100.31 following a massive breakout off the $97.67 swing low. The candles with bullish color and higher highs indicate buyers continue to respect the 50ema at $101.02. The RSI is near 52 with neutral momentum.
In terms of volume profile, the breakout pivot is around $100.59 to $101.06. The .618 Fib suggests that $103.09 will be the next upside target in the next few weeks. Above $100.59, the price action is in a clean, strongly bullish channel. The higher highs and higher lows pattern indicates that buyers are firmly in control.
Trade Idea: Buy $101.04, targeting $103.09, with a stop at $100.59.
GBP/USD Holds $1.3360 – White Descending Trendline Test on 4h GBP/USD Price Chart – Source: Tradingview The GBP/USD is trading at $1.3360 on the 4-hour time frame. The 4-hour candles, which are colored mixed red and green, tested the white trendline at $1.3380 after rejection of the red ma at $1.337. The 4-hour candle with a bullish wick indicates the absorption of buy orders at the resistance, and the 4-hour candles maintain higher highs.
The RSI is near 57 with neutral momentum. In terms of volume profile, the pivot cluster is at $1.331 to $1.338. The next support level is expected to be in the $1.325 to $1.331 area. Within the overall trading range, the price is in a neutral to bullish structure above the trendline, with higher highs indicating that buyers are active on dips.
Trade Idea: Buy $1.3360, targeting $1.345, with a stop at $1.325.
EUR/USD Holds $1.1418 – EMA 50 Defense on 4h EUR/USD Price Chart – Source: Tradingview The EUR/USD is trading at $1.1418 on the 4-hour time frame. The 4-hour candles, which are colored mixed red and green, defended the 50ema at $1.1423 after rejection of the red ma at $1.162. The 4-hour candle with a bullish wick indicates the absorption of buy orders, and the 4-hour candles maintain higher lows. The RSI is near 50 with neutral momentum.
In terms of volume profile, the pivot cluster is at $1.140 to $1.150. The next resistance level is expected to be in the $1.155 to $1.162 area. Despite a downtrend, the price is in a neutral to bullish structure above the 50ema, with higher lows indicating that buyers are active on dips.
Trade Idea: Buy $1.1418, targeting $1.155, with a stop at $1.140.
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United Overseas Bank’s (UOB) Quek Ser Leang reports that GBP/USD failed to sustain its recent strong run, pulling back after testing resistance near 1.3410. Short-term price action now points to an extended correction with focus on 1.3330–1.3315 supports, while on a 1–3 week view a break below 1.3315 would signal that the Pound’s latest advance has ended.
Correction eyes 1.3315 strong support"24-HOUR VIEW: After GBP rose more than we expected on Monday, we highlighted the following yesterday: “Strong momentum suggests further GBP strength toward 1.3410. A break above this major resistance is not ruled out, but based on the prevailing momentum, the next resistance at 1.3445 is likely out of reach. To sustain the momentum, GBP must hold above 1.3350, with minor support at 1.3370.” The subsequent price movements did not unfold as expected. GBP eked out a fresh high of 1.3401 before pulling back sharply to a low of 1.3349. The pullback has scope to extend, but it is currently unclear whether any decline can reach the strong support at 1.3315. Note that there is another support level at 1.3330. On the upside, resistance levels are at 1.3370 and 1.3390."
"1-3 WEEKS VIEW: We have held a positive GBP view since early last week. After GBP rose close to our technical target at 1.3410, we highlighted yesterday (07 Jul, spot at 1.3390) that “a break above 1.3410 will not be surprising and could lead to a move to 1.3445.” We did not expect GBP to pull back sharply, as it closed lower for the first time in eight days (1.3360, -0.23%). Upward momentum has slowed with the pullback, and a breach of 1.3315 (‘strong support’ level was at 1.3300 yesterday), would indicate that the advance in GBP has come to an end."
(This article was created with the help of an Artificial Intelligence tool and reviewed by an editor. Know more.)
The GBP/USD pair trades almost flat at around 1.3355 during the European trading session on Wednesday. The Cable consolidates as investors await the Federal Open Market Committee (FOMC) minutes of the June policy meeting, which will be published at 18:00 GMT.
At press time, the US Dollar Index (DXY), which tracks the Greenback’s value against six major currencies, trades marginally lower to near 101.05.
Investors will closely read the FOMC Minutes to gauge possible reasons that led officials to abandon forward guidance on the monetary policy outlook. In the policy meeting, the Fed decided to leave interest rates unchanged in the range of 3.50%-3.75%, citing upside inflation risks, and 9 out of 19 policymakers favored an interest rate hike by the year-end.
Meanwhile, the British Pound (GBP) struggles for direction as investors seek fresh cues regarding the United Kingdom’s (UK) fiscal policy outlook under new leadership. However, newly elected Member of Parliament and Mayor of Greater Manchester, Andy Burnham, the front-runner for UK leadership after Prime Minister (PM) Keir Starmer’s resignation, has already stated that he will continue Labour’s manifesto.
GBP/USD technical analysis
GBP/USD trades calmly near 1.3355, holding a mildly bullish bias as it remains above the 20-day exponential moving average (EMA) at 1.3321.
The bounce from the recent 1.32 area and the pair’s ability to stay supported by the short-term EMA hint at a tentative recovery phase, while the Relative Strength Index (RSI) at 52.8 shows modest positive momentum without entering overbought territory.
On the topside, the next significant barrier is the downward resistance trend line, with its break level around 1.3500. Looking down, the immediate support is reinforced by the 20-day EMA at 1.3321, and a daily close back below this level would weaken the current constructive tone and force the pair to revisit the June 24 low at around 1.3140.
(The technical analysis of this story was written with the help of an AI tool. Know more.)
Economic Indicator FOMC Minutes FOMC stands for The Federal Open Market Committee that organizes 8 meetings in a year and reviews economic and financial conditions, determines the appropriate stance of monetary policy and assesses the risks to its long-run goals of price stability and sustainable economic growth. FOMC Minutes are released by the Board of Governors of the Federal Reserve and are a clear guide to the future US interest rate policy.
Read more.
Next release: Wed Jul 08, 2026 18:00
Frequency: Irregular
Consensus: -
Previous: -
Source: Federal Reserve
Minutes of the Federal Open Market Committee (FOMC) is usually published three weeks after the day of the policy decision. Investors look for clues regarding the policy outlook in this publication alongside the vote split. A bullish tone is likely to provide a boost to the greenback while a dovish stance is seen as USD-negative. It needs to be noted that the market reaction to FOMC Minutes could be delayed as news outlets don’t have access to the publication before the release, unlike the FOMC’s Policy Statement.
British Pound declines to near 1.3350 as US launches strikes on IranThe GBP/USD pair loses traction to near 1.3355 during the Asian trading hours on Wednesday. The US Dollar (USD) edges higher against the British Pound (GBP) amid renewed geopolitical tensions after the US renewed strikes on Iran. The Federal Reserve’s (Fed) June meeting minutes will be published later on Wednesday.
Washington unleashed a new wave of strikes against Tehran on Tuesday and revoked a license allowing the country to sell oil after three tankers were attacked in the Strait of Hormuz, per Reuters. Geopolitical fears surge following this headline, supporting the Greenback as a safe-haven asset. Read more...
British Pound Sterling Runs Out of American Bad News After Nine Straight DaysThe Pound's nine-session march against the Dollar ended on Tuesday, and it took exactly one geopolitical headline to finish it. Cable opened near 1.3392, poked above the 1.3400 handle in early European trade, and then spent the balance of the session giving ground to settle around 1.3356, down 0.27% and back below a daily moving-average cluster that has been waiting overhead for weeks.
The streak that died on Tuesday was never a Sterling story to begin with, and its fuel was entirely imported: nine consecutive gains off the 1.3140 base in late June, powered by a deteriorating American labour tape. June nonfarm payrolls printed 57,000 against a consensus near 115,000, earlier months were revised lower, and Tuesday's ADP four-week average employment change slipped to 21,000 from 24,250, extending the softening trend. Read more...
The Pound Sterling (GBP) retreats against the US Dollar (USD) on Tuesday as tensions in the Middle East rise, following reports of attacks on two ships in the Strait of Hormuz. The GBP/USD pair trades at 1.3373, down 0.11%. Read More...
British Pound gains as easing Fed hike bets weigh on US DollarGBP/USD continues its winning streak for the ninth consecutive day, trading around 1.3390 during the Asian hours on Tuesday. The currency pair rises as the US Dollar (USD) faces headwinds as market participants scale back expectations for Federal Reserve (Fed) rate hikes this month and in September. This shift in sentiment followed a cooling employment report that revealed fewer jobs added across April, May, and June than Wall Street had anticipated. Read More...
Pound Sterling rallies into its own coronationGBP/USD has quietly put together eight consecutive higher daily closes, a grind from near 1.3150 that has delivered the pair directly onto its 200-day Exponential Moving Average (EMA), with the 50-day EMA just beneath it and the 1.3400 handle immediately overhead. Monday added another modest gain: Cable based near 1.3350 through the London morning, then climbed all afternoon to stall just shy of 1.3400. Read More...
The American currency gained ground as traders focused on recent events in the Strait of Hormuz.
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U.S. Dollar Moves Higher As Oil Prices Rally
DXY 070726 4h Chart U.S. Dollar Index gains ground as traders focus on the rally in the oil markets. An LNG carrier from Qatar was hit in the Strait of Hormuz. A Saudi oil tanker also suffered damage. Iran insists that ships should go through approved routes.
The nearest resistance level for U.S. Dollar Index is located in the 101.15 – 101.30 range. In case U.S. Dollar Index manages to settle above the 101.30 level, it will head towards the next resistance, which is located in the 101.80 – 101.95 range.
EUR/USD Tests Support At 1.1420 – 1.1435
EUR/USD 070726 4h Chart EUR/USD pulled back as demand for risk assets declined after attacks on vessels in the Strait of Hormuz.
Traders also focused on the Industrial Production report from Germany. The report indicated that Industrial Production increased by +0.9% month-over-month in May, compared to analyst consensus of +0.2%.
Currently, EUR/USD is trying to settle below the support level at 1.1420 – 1.1435. This support level has already been tested several times and proved its strength. In case EUR/USD manages to settle below the 1.1420 level, it will get to the test of the 50 MA at 1.1410. A move below the 50 MA will open the way to the test of the support level at 1.1350 – 1.1365.
GBP/USD Retreats Amid Falling Demand For Risk Assets GBP/USD 070726 4h Chart GBP/USD is losing ground as traders focus on general strength of the American currency.
From the technical point of view, GBP/USD failed to settle above the 1.3400 level and pulled back towards 1.3370. The nearest support level for GBP/USD is located in the 1.3335 – 1.3350 range.
If GBP/USD declines below the 1.3335 level, it will head towards the 50 MA at 1.3285. In case GBP/USD manages to settle below the 50 MA, it will move towards the next support level at 1.3250 – 1.3265.
USD/CAD Tests The 1.4200 Level
USD/CAD 070726 4h Chart USD/CAD remains stuck below the resistance at 1.4225 – 1.4240 as traders focus on the strong rally in the oil markets. Gold and silver are losing ground, which is bearish for the Canadian currency. Other commodity-related currencies are moving lower in today’s trading session.
If USD/CAD settles below the 50 MA at 1.4204, it will head towards the support level at 1.4125 – 1.4140. RSI is in the moderate territory, so there is plenty of room to gain additional downside momentum in case the right catalysts emerge.
On the upside, USD/CAD needs to settle above the resistance level at 1.4225 – 1.4240 to gain upside momentum in the near term. A move above 1.4240 will push USD/CAD towards the next resistance at 1.4335 – 1.4350.
USD/JPY Remains Stuck Near Key Resistance Level USD/JPY 070726 4h Chart USD/JPY is losing some ground as traders react to the Household Spending report from Japan. The report indicated that Household Spending increased by +3.7% month-over-month in May, compared to analyst forecast of +1.4%. On a year-over-year basis, USD/JPY declined by -0.4%, compared to analyst consensus of -2.5%.
The technical picture remains unchanged as USD/JPY is trying to settle above the resistance level at 161.50 – 162.00. If USD/JPY settles above the 162.00 level, it will move towards recent highs near 162.80. A move above the 162.80 level will push USD/JPY towards the 165.00 level.
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Scotiabank strategists Shaun Osborne and Eric Theoret note the British Pound (GBP) is slightly softer against the US Dollar (USD) after encountering resistance near 1.3400, with limited fresh data and Bank of England (BoE) news. The RSI recovery suggests improving momentum, but multiple resistance levels between 1.3420 and 1.3520 constrain upside. They look for GBP/USD to trade in a 1.3350–1.3450 range in the near term.
Momentum improves but upside capped"The pound is soft and also entering Tuesday’s NA session with a fractional 0.1% decline vs. the USD after finding some near-term resistance around 1.3400."
"Fundamental releases have been limited and developments out of the BoE have been limited to media reports of a proposed easing in bank capital rules. Political developments have been limited with markets waiting for fresh news on the looming leadership transition from PM Starmer to the ‘leader-in-waiting’ Burnham."
"In terms of fiscal risks, the UK’s OBR (Office for Budget Responsibility) has underscored the challenges facing the UK and specifically the cost (£100bn) of stabilizing the national debt around current levels (95% of GDP)."
"Neutral/bullish—the RSI’s recovery has extended through the neutral threshold at 50 and momentum appears to be pushing further into bullish territory. The 50 and 200 day MA’s (both around 1.3400) had been flagged as offering the potential for near-term resistance and appear to be doing so."
"The daily chart offers dense resistance at several levels (1.3420, 1.3450. 1.3500, 1.3520) ahead of 1.3600. We look to a near-term range bound between 1.3350 and 1.3450."
(This article was created with the help of an Artificial Intelligence tool and reviewed by an editor. Know more.)
The British Pound (GBP) ticks lower to near 1.3380 against the US Dollar (USD) during the European trading session on Tuesday. The GBP/USD pair edges down as the US Dollar gains slightly; however, the Cable is broadly upbeat.
At press time, the US Dollar Index (DXY), which tracks the Greenback’s value against six major currencies, trades 0.1% higher to near 100.90. The US Dollar is expected to trade cautiously as investors await the Federal Open Market Committee (FOMC) minutes of the June policy meeting, which will be released on Wednesday. Investors will closely read FOMC minutes to get fresh cues regarding the Federal Reserve’s (Fed) monetary policy outlook. Read more...
GBP/USD outlook: Recovery faces strong headwinds on approach to key 1.3400 resistance zoneCable moves within a narrow-range sideways mode for the second consecutive day, after 1% advance last week that completed reversal pattern on weekly chart (after the downleg from 1.3869 was contained by ascending trendline, drawn off 1.0348, 2022 low) and generated positive signal on close above weekly Ichimoku cloud top (1.3335).
On the other side, the picture on daily chart is not that optimistic (14-d momentum remains in negative territory and turns south, stochastic is emerging from overbought territory) as long upper shadows on last two daily candles point to strong headwinds from very significant 1.3400 resistance zone (consisting of converged 200/100/55DMAs / 50% retracement of 1.3653/1.3140 / daily cloud base). Read more...
The British Pound looks set to extend its recovery against the US dollar in the near term, according to UOB, with the bank expecting GBP/USD to test fresh highs before the current rally begins to lose momentum. While UOB remains constructive over the next one to three weeks, it believes the broader outlook is still one of range trading over the coming months rather than the start of a sustained bull market.
Image: GBP/USD performance 1 year chart - 07/07/2026 Why UOB Thinks the British Pound Can Push Higher UOB says Sterling's recent rebound has been stronger than expected.
After initially anticipating GBP/USD would remain within a relatively narrow range, the pair instead dipped briefly before rallying sharply to almost 1.3400, closing last week with firm upside momentum.
The bank believes that momentum should allow GBP/USD to test resistance around 1.3410, with a break above that level potentially opening the door to 1.3445.
However, UOB cautions that the move is becoming increasingly stretched, suggesting further gains are likely to be more gradual than the recent advance.
The bank first turned bullish on Sterling at the end of June, arguing that GBP/USD had scope to rebound from the 1.3250 area.
Since then, the pair has steadily climbed, supported by improving technical momentum and a series of higher daily closes.
GBP/USD was trading close to 1.3380 on Tuesday morning after gaining more than 1% so far in July, recovering much of June's decline.
According to UOB, only a sustained move below 1.3300 would signal that the current upward momentum has faded.
What's the Longer-Term Sterling Outlook? While the short-term picture has improved, UOB is less optimistic over a one-to-three month horizon.
The bank expects momentum indicators to flatten, with GBP/USD likely to settle into a broad trading range rather than continue climbing.
It sees initial support around 1.3210, followed by 1.3160, while resistance is located at 1.3610 and 1.3655.
That suggests Sterling may continue to perform well over the coming weeks before meeting stronger resistance later in the summer.
What's the Forecast for the Pound versus the Dollar? UOB believes the immediate bias remains higher.
A decisive break above 1.3410 would increase the likelihood of a move towards 1.3445 over the next one to three weeks.
Beyond that, however, the bank expects GBP/USD to lose directional momentum and return to range trading, with neither Sterling nor the US dollar likely to establish a sustained trend over the medium term.
Image: GBP/USD bank consensus forecasts - July 2026 survey poll results GBP/USD Forecast FAQIs UOB bullish on GBP/USD?
Yes, in the short term. UOB expects GBP/USD to remain supported over the next one to three weeks, although it is less bullish over the following few months.
What are UOB's key GBP/USD levels?
The bank sees resistance at 1.3410 and 1.3445, while 1.3300 is the key support level that would suggest the current rally is fading.
What is UOB's longer-term view?
Rather than expecting a sustained rally, UOB believes GBP/USD is likely to trade within a broad range over the next one to three months, with support at 1.3210 and 1.3160 and resistance at 1.3610 and 1.3655.
What would strengthen the bullish outlook?
A decisive move above 1.3410 would reinforce the positive technical picture and could pave the way for a test of 1.3445.
Oil Rises as Hormuz Risks Offset Saudi Price Cuts and Higher OPEC+ Supply but Bearish Picture Remains Oil prices are rising on Tuesday, recovering from a four-month low near $67 a barrel as renewed concerns over shipping security in the Strait of Hormuz temporarily outweigh expectations of stronger global crude supplies.
Crude rebounded after reports that a tanker transiting the Strait of Hormuz was struck off the coast of Oman, highlighting that security risks remain elevated despite the reopening of the strategic shipping route.
While the Strait has resumed operations, shipping volumes remain below pre-conflict levels and investors remain alert to any disruption that could threaten global energy supplies. As a result, a modest geopolitical risk premium has returned to the market.
However, the broader outlook for oil remains bearish as attention shifts back to rising supply.
Saudi Aramco cut the August official selling price of its flagship Arab Light crude for Asian buyers, signalling intensifying competition for market share at a time when regional supply is recovering.
The move follows OPEC+'s decision to increase August production targets, reinforcing expectations that additional barrels will return to the market during the second half of the year. Combined with improving export flows from the Gulf, the supply outlook continues to point towards a better-supplied oil market, limiting the scope for any sustained recovery in prices.
Oil Forecast – Technical Analysis
Oil broke below its symmetrical triangle pattern and the 200-day SMA, falling to a four-month low near $67 before finding support. The RSI has moved into oversold territory, suggesting the recent sell-off may pause before the next directional move.
While prices have rebounded towards $70, the broader trend remains bearish.
Sellers will look for a break below $67 to expose the February low around $62.50, followed by the psychological $60 level.
Any recovery would first need to reclaim the 200-day SMA near $74. A move above there would bring $80 into focus.
GBP/USD rises for an eigth day, testing a key resistance GBP/USD has climbed to a three-week high near 1.34 as the U.S. dollar weakens following softer U.S. economic data and a moderation in Federal Reserve rate hike expectations.
The dollar has remained under pressure since last week's weaker-than-expected payrolls report, which showed slower job creation across April, May and June than markets had anticipated.
Yesterday's ISM Services PMI reinforced that narrative. While activity remained firmly in expansion territory at 54.0, broadly in line with expectations, the Prices Paid component fell sharply from 71.3 to 67.7, suggesting inflationary pressures continue to ease. At the same time, the employment index improved to 51.2, pointing to a labour market that is cooling gradually rather than deteriorating sharply.
Taken together, the data support the view that inflation may continue to moderate without a significant slowdown in economic activity, reducing the urgency for further Federal Reserve tightening.
Markets now see a 41% probability that the Fed will leave interest rates unchanged in September, up from 32% a week ago, weighing on the U.S. dollar.
However, sterling's upside may also prove limited as investors have similarly scaled back expectations for further Bank of England tightening. Markets are now pricing around a 70% probability of a single 25-basis-point rate hike this year, compared with expectations for two increases just a few weeks ago.
Bank of England Governor Andrew Bailey recently reiterated that inflation is expected to return to the Bank's 2% target, although the process may take longer than previously anticipated.
Looking ahead, the UK economic calendar is relatively quiet. The focus will be on the Bank of England's Financial Stability Report. Any indication that policymakers are becoming more concerned about financial conditions or economic risks could reinforce expectations for a cautious policy approach and weigh on sterling.
GBP/USD Forecast – Technical Analysis
GBP/USD has rebounded from the 1.3200 support zone, rising to test resistance around 1.3400, where the 50-day and 200-day SMAs converge.
The RSI has moved above 50, indicating improving bullish momentum.
A sustained break above the moving averages would expose 1.3500, where falling trendline resistance and the May swing high converge. A move above that level would create a higher high and open the door towards 1.3650.
Failure to break above the moving averages could see the pair drift back towards support at 1.3330. A break below there would expose the 1.3200 support zone once again.
United Overseas Bank’s (UOB) Quek Ser Leang highlights a sharp GBP/USD advance to 1.3397 and a firm close at 1.3391. Intraday, Leang sees scope for further gains toward 1.3410, though 1.3445 may stay out of reach. On a 1–3 week horizon, a break above 1.3410 could open 1.3445, while only a fall below 1.3300 would negate the positive Pound bias.
Pound rally faces layered resistance"24-HOUR VIEW: GBP rose to 1.3380 last Friday and then pulled back. When it was at 1.3345 yesterday, we highlighted the following: “While there is scope for GBP to pull back further, any decline is likely to be contained within a 1.3320/1.3375 range. In other words, GBP is unlikely to break clearly below 1.3320.” The subsequent price movements did not unfold as expected. GBP dipped to 1.3329 before staging a sharp advance to 1.3397. GBP closed on a firm note at 1.3391 (+0.29%). Strong momentum suggests further GBP strength toward 1.3410. A break above this major resistance is not ruled out, but based on the prevailing momentum, the next resistance at 1.3445 is likely out of reach. To sustain the momentum, GBP must hold above 1.3350, with minor support at 1.3370"
"1-3 WEEKS VIEW: We turned positive on GBP last Tuesday (30 Jun, spot at 1.3255), indicating that “while GBP could rebound further, it is currently unclear whether any advance can reach 1.3355.” After GBP broke above 1.3355, we highlighted on Friday (03 Jul, spot at 1.3345) that “the advance is overbought, but it could rise further and test 1.3410.” Yesterday, GBP rose to a high of 1.3397. A break above 1.3410 will not be surprising, and it could lead to a move to 1.3445. Overall, only a breach of 1.3300 (‘strong support’ previously at 1.3280) would indicate that GBP is not rising further."
(This article was created with the help of an Artificial Intelligence tool and reviewed by an editor. Know more.)
The British Pound (GBP) ticks lower to near 1.3380 against the US Dollar (USD) during the European trading session on Tuesday. The GBP/USD pair edges down as the US Dollar gains slightly; however, the Cable is broadly upbeat.
At press time, the US Dollar Index (DXY), which tracks the Greenback’s value against six major currencies, trades 0.1% higher to near 100.90.
The US Dollar is expected to trade cautiously as investors await the Federal Open Market Committee (FOMC) minutes of the June policy meeting, which will be released on Wednesday. Investors will closely read FOMC minutes to get fresh cues regarding the Federal Reserve’s (Fed) monetary policy outlook.
In the United Kingdom (UK), firm hopes that ongoing fiscal principles will continue despite the leadership transition are supporting the British Pound. Andy Burnham, the newly elected Member of Parliament and Mayor of Greater Manchester, is the front-runner for UK leadership after Prime Minister (PM) Keir Starmer’s resignation.
GBP/USD technical analysis
GBP/USD trades at around 1.3380 at press time. The Cable has shown a stalwart rally after attracting significant buying interest near 1.3140 two weeks back. The pair holds a constructive near-term tone as it remains above the 20-day Exponential Moving Average (EMA) at 1.3320.
Momentum is mildly positive, with the Relative Strength Index (14) at 55.7, hinting that buyers retain control without the market appearing overstretched.
On the topside, the next key hurdle is the downward-sloping resistance trend line, which comes in around 1.3526 and caps the broader recovery. On the downside, initial support is seen at the 20-day EMA at 1.3320 ahead of the June low near 1.3140.
(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.
GBP/USD started a recovery wave and surpassed the 1.3320 resistance. A key contracting triangle is forming with support at 1.3290 on the 4-hour chart. EUR/USD struggled to extend its recovery wave above the 1.1475 resistance. WTI Crude Oil prices are under pressure below the $72.50 pivot level. GBP/USD Technical Analysis The British Pound started a recovery wave above 1.3200 against the US Dollar. GBP/USD gained pace after it settled above 1.3250.
Looking at the 4-hour chart, the pair surged above the 100 simple moving average (red, 4-hour) and 1.3320. However, the bears defended the 1.3385 resistance and the 200 simple moving average (green, 4-hour).
A high was formed at 1.3384, and the pair started consolidating gains. There was a minor decline below 1.3350. If there is another decline, the pair might find support near 1.3290. Besides, there is a key contracting triangle forming with support at 1.3290.
The first major support could be near 1.3250. A downside break and close below 1.3250 might send the pair toward 1.3220. Any more losses could open the doors for a test of 1.3150.
On the upside, the bears might remain active near 1.3385. The next major resistance might be 1.3400. A close above 1.3400 could spark a sharp increase. In the stated case, the bulls could aim for a move to 1.3500.
Looking at EUR/USD, the bulls attempted a recovery wave, but they need a daily close above 1.1475 for upside continuation.
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British Pound gains as easing Fed hike bets weigh on US DollarGBP/USD continues its winning streak for the ninth consecutive day, trading around 1.3390 during the Asian hours on Tuesday. The currency pair rises as the US Dollar (USD) faces headwinds as market participants scale back expectations for Federal Reserve (Fed) rate hikes this month and in September. This shift in sentiment followed a cooling employment report that revealed fewer jobs added across April, May, and June than Wall Street had anticipated.
Furthermore, a recent drop in crude oil prices, driven by an OPEC+ production boost and a US-Iran peace deal, has alleviated broader inflationary pressures, softening the urgency for an aggressive Fed policy outlook. Read more...
Pound Sterling rallies into its own coronationGBP/USD has quietly put together eight consecutive higher daily closes, a grind from near 1.3150 that has delivered the pair directly onto its 200-day Exponential Moving Average (EMA), with the 50-day EMA just beneath it and the 1.3400 handle immediately overhead. Monday added another modest gain: Cable based near 1.3350 through the London morning, then climbed all afternoon to stall just shy of 1.3400.
The interesting part is what did not stop it. A hawkish Federal Reserve (Fed) governor was on the wires mid-afternoon, US services data came in warm enough to keep the hike debate alive, and the pair rallied through all of it, which suggests Monday was less about fresh good news for the Pound and more about a Dollar that has run out of new arguments. Read more...
Key Points:Sticky core inflation and fiscal deficits have reinforced the US Dollar’s strength amid monetary policy divergence.DXY held at $100.93 with green continuation candles retesting Fibonacci 0.618 level.EUR/USD defended $1.1430 blue trendline support with green rejection candles absorbing selling pressure.GBP/USD held $1.3380 resistance zone, testing key levels with mixed candles and neutral momentum.
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Currencies Reflect Divergent Monetary Policies and Economic Fundamentals Dollar, euro and pound rates are still subject to conflicting central bank policies and economic forces as of July 7. On the one hand, the U.S. Federal Reserve’s wait-and-see policy in the face of ongoing core inflation is sustaining dollar rates on the basis of expectations for a relatively tight rate setting in the foreseeable future; on the other hand, there is domestic demand and the status quo for dollars as reserve currency.
A mix of divergent fiscal settings and disparate inflation pressures in various parts of the euro zone and the European Central Bank’s push toward price stability characterize the euro. Policy pass-through in the area remains contingent on a range of national policies, keeping rates sensitive to growth and wage data.
As with other currencies, the Bank of England is considering both services inflation and softness in economic growth, and its policy path is a function of these variables, alongside UK fiscal policy and labor market trends, and relative policy settings for other central banks, which is what largely drives the cross rates with the dollar and euro.
Divergent inflation paths, fiscal settings and growth resilience in the three economies create two-sided risks, with trade and capital flows further driving currency differentiation, as markets seek to discern which central bank will best provide stability and growth.
DXY Holds $100.93 – Fibonacci 0.618 Retest on 1D Dollar Index Price Chart – Source: Tradingview DXY is sitting at $100.93 on the daily time frame. Following a breakout from the $97.67 low, buyers retested the 0.618 Fibonacci retracement zone around $100.31, creating green and red mixed candles. The asset continues to make higher highs, suggesting the upside remains intact above the $100.31 price level and its ascending white trendline.
With RSI hovering around 58, the DXY maintains a neutral-to-bullish bias. The $100.31 zone now serves as a breakout pivot point, per the volume profile, while the next 103 Fibonacci extension sits near $103.09 within the next couple of weeks. The market continues trading in an ascending channel and the higher highs/lows structure keeps the trend bullish.
Trade Idea: Buy at $100.93 with a target of $103.09 and a stop loss under $100.31.
GBP/USD Holds $1.3380 – White Descending Trendline Test on 4h GBP/USD Price Chart – Source: Tradingview GBP/USD is trading at $1.3380 within the 4h timeframe. After getting rejected off the red moving average around $1.337, buyers tested the descending white trendline around $1.3380 and formed green and red mixed candles. The price creates bullish rejection wicks and continues to keep higher highs within the chart. Currently, RSI sits around 67 and is still neutral on the 4h timeframe.
The $1.331 to $1.338 zones are a pivot area, per the volume profile, with the next zone of support around $1.325 to $1.331. GBP/USD still trades in a bullish trend and is still neutral and above its trendline. Higher highs and lows are still in place, and the trendline continues to hold the price higher within the trading range.
Trade Idea: Buy at $1.3380 with a target of $1.345 and a stop loss under $1.325.
EUR/USD Holds $1.1430 – EMA 50 Defense on 4h EUR/USD Price Chart – Source: Tradingview EUR/USD is trading at $1.1430 within the 4h timeframe. After getting rejected off the red moving average around $1.162, buyers retested the 50 EMA around $1.1419 and formed green and red mixed candles. The price creates bullish wicks and continues to keep higher lows within the chart.
Currently, RSI sits around 52 and is still neutral on the 4h timeframe. The $1.140 to $1.150 zones are a pivot area, per the volume profile, with the next zone of resistance around $1.155 to $1.162. EUR/USD still trades in a bullish trend and remains neutral and above its 50 EMA. Higher highs and lows are still in place, and the 50 EMA continues to hold the price higher in the near-term.
Trade Idea: Buy at $1.1430 with a target of $1.155 and a stop loss under $1.140.
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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.
The Pound to Dollar (GBP/USD) exchange rate traded in a narrow range on Monday as easing UK political uncertainty offset renewed demand for the US Dollar following last week's sharp selloff.
At the time of writing, GBP/USD was trading at $1.3352, little changed on the day.
Latest — Exchange Rates:
Pound to Dollar (GBP/USD): 1.335559 (+0.03%)
Euro to Dollar (EUR/USD): 1.141696 (-0.17%)
Dollar to Yen (USD/JPY): 162.33951 (+0.61%)
DAILY RECAP:
The US Dollar attracted support on Monday as US markets reopened following the long Independence Day weekend.
The ‘Greenback’ seemed to have entered oversold conditions following its sharp losses in the wake of last week’s non-farm payrolls report, which reported an unexpectedly large slowdown in job creation.
Therefore, some price-conscious investors were willing to buy the dip, lifting the US Dollar.
Meanwhile, the latest ISM services PMI printed in line with expectations, easing from 54.5 in May to 54 in June. Although this was a slight softening of activity, it still represented a healthy expansion in the US services sector.
Meanwhile, the Pound (GBP) held strong on Monday as investors continued to scale back the political risk premium that has weighed on Sterling in recent weeks.
With MP Andy Burnham widely expected to become the next Prime Minister, markets appear increasingly confident that the UK will avoid a lengthy and disruptive Labour leadership contest.
Burnham has moved to reassure investors since launching his leadership bid, pledging to maintain the government’s existing fiscal rules while also outlining ambitious plans to support the economy.
This has been well received by GBP investors, with Sterling finding support as concerns over UK political instability continue to recede.
Near-Term GBP/USD Forecast: US Employment Data to Support the Dollar? Looking forward, high-impact data is thin on the ground on Tuesday, with the US weekly ADP employment change figure being the only release of note. This mid-tier data could support the US Dollar, if it reports healthy growth in US private employment.
Elsewhere, market risk appetite could influence the pairing. The safe-haven US Dollar would likely benefit if the market mood sours, while the increasingly risk-sensitive Pound could attract support if sentiment brightens. Any shifts in risk appetite could see GBP/USD waver.
