The GBP/USD pair attracts some buyers for the second straight day, though it lacks follow-through and remains capped near mid-1.3500s through the early European session on Friday. Spot prices, for now, seem to have stalled the recovery from a nearly three-week low, touched on Wednesday, as traders keenly await the release of the US Nonfarm Payrolls (NFP).
The closely watched US monthly employment details will be looked upon for more cues about the US Federal Reserve's (Fed) future policy path, which, in turn, will drive the US Dollar (USD) and provide a fresh impetus to the GBP/USD pair. Heading into the key data risk, some repositioning trade helps the Greenback recover part of the previous day's heavy losses to over a one-week low and acts as a headwind for the currency pair.
Apart from this, persistent geopolitical uncertainties amid renewed US-Iran hostilities and clashes over the Strait of Hormuz turn out to be another factor underpinning the safe-haven USD. However, reduced bets for a September Fed rate hike, along with soft US bond yields, hold back USD bulls from placing aggressive bets and might act as a tailwind for the GBP/USD pair, warranting caution before positioning for any meaningful downside.
From a technical perspective, the GBP/USD pair maintains a mild bullish bias above the 200-period Simple Moving Average (SMA) on the 4-hour chart and the 38.2% Fibonacci retracement of the July-August rally. Moreover, momentum indicators are constructive, with the Relative Strength Index hovering just above the neutral 50 level and the Moving Average Convergence Divergence (MACD) line sitting above the signal line in positive territory.
This hints that the upside pressure is gradually building as the 38.2% Fibo. at 1.3525 turns into nearby support. This is followed by the 200-period SMA around 1.3490 and the 50.0% retracement near 1.3476, with deeper cushions at the 61.8% and 78.6% levels at 1.3428 and 1.3359, respectively. On the topside, immediate resistance emerges at the 23.6% Fibo. at 1.3584, ahead of a more significant hurdle at the prior swing high region around 1.3681.
(The technical analysis of this story was written with the help of an AI tool. Know more.)
GBP/USD 4-hour chart
Nonfarm Payrolls FAQs Nonfarm Payrolls (NFP) are part of the US Bureau of Labor Statistics monthly jobs report. The Nonfarm Payrolls component specifically measures the change in the number of people employed in the US during the previous month, excluding the farming industry.
The Nonfarm Payrolls figure can influence the decisions of the Federal Reserve by providing a measure of how successfully the Fed is meeting its mandate of fostering full employment and 2% inflation. A relatively high NFP figure means more people are in employment, earning more money and therefore probably spending more. A relatively low Nonfarm Payrolls’ result, on the either hand, could mean people are struggling to find work. The Fed will typically raise interest rates to combat high inflation triggered by low unemployment, and lower them to stimulate a stagnant labor market.
Nonfarm Payrolls generally have a positive correlation with the US Dollar. This means when payrolls’ figures come out higher-than-expected the USD tends to rally and vice versa when they are lower. NFPs influence the US Dollar by virtue of their impact on inflation, monetary policy expectations and interest rates. A higher NFP usually means the Federal Reserve will be more tight in its monetary policy, supporting the USD.
Nonfarm Payrolls are generally negatively-correlated with the price of Gold. This means a higher-than-expected payrolls’ figure will have a depressing effect on the Gold price and vice versa. Higher NFP generally has a positive effect on the value of the USD, and like most major commodities Gold is priced in US Dollars. If the USD gains in value, therefore, it requires less Dollars to buy an ounce of Gold. Also, higher interest rates (typically helped higher NFPs) also lessen the attractiveness of Gold as an investment compared to staying in cash, where the money will at least earn interest.
Nonfarm Payrolls is only one component within a bigger jobs report and it can be overshadowed by the other components. At times, when NFP come out higher-than-forecast, but the Average Weekly Earnings is lower than expected, the market has ignored the potentially inflationary effect of the headline result and interpreted the fall in earnings as deflationary. The Participation Rate and the Average Weekly Hours components can also influence the market reaction, but only in seldom events like the “Great Resignation” or the Global Financial Crisis.
Pound-Dollar could extend its recovery if US payrolls disappoint, although cautious comments from Bailey may limit Sterling’s upside. The Pound US Dollar (GBP/USD) exchange rate edged up on Thursday, after touching a 20-day low on Wednesday, although the recovery was limited.
At the time of writing, GBP/USD was trading at $1.3496, marginally up on the day.
Latest — Exchange Rates:
Pound to Dollar (GBP/USD): 1.352805 (+0.34%)
Euro to Dollar (EUR/USD): 1.16315 (+0.40%)
Dollar to Yen (USD/JPY): 155.82562 (-1.95%)
DAILY RECAP:
The Pound (GBP) traded without a clear direction on Thursday as markets digested the UK’s final services PMI.
Although growth in the UK’s vital services sector reached a four-month high in August, the final reading was revised slightly lower than the preliminary estimate. The PMI rose from 52.1 to 52.5, rather than 52.8, which limited Sterling’s ability to make gains.
Meanwhile, GBP investors appeared unsettled by the recent surge in UK government borrowing costs, after gilt yields hit a 19-year high on Wednesday. Although bonds recovered on Thursday, yields remained sharply up on the week.
The US Dollar (USD) trended lower on Thursday as a risk-on mood swept markets, thereby dampening the appeal of the safe-haven ‘Greenback’.
Market sentiment improved as government bond yields around the world declined, easing concerns about how higher borrowing costs could choke off global economic growth.
In addition, a slight pullback in Federal Reserve interest rate hike expectations weighed on the Dollar directly and contributed to the improving appetite for risk. Market odds for a hike this month dipped from 63% on Wednesday to 60% on Thursday, with this slight drop putting modest pressure on USD.
Near-Term GBP/USD Forecast: Non-Farm Payrolls in Focus Looking ahead to Friday, the Pound could come under scrutiny as investors assess a speech from Bank of England (BoE) Governor Andrew Bailey. Should Bailey continue to signal caution over the prospect of further interest rate hikes, Sterling may struggle to hold its ground.
On the other hand, a stronger emphasis on the upside risks to inflation could give the Pound a lift, particularly if Bailey points to a greater need for tighter monetary policy.
As for the US Dollar, USD will focus on the latest non-farm payrolls report. Weak jobs growth in August could dent the ‘Greenback’, particularly if it's seen as dampening Federal Reserve interest rate hike bets.
Exchange Rates UK Research Our currency coverage draws on live market data, official economic releases and published bank research.
GBP/USD trades near 1.35, while UBS valuation models place purchasing-power parity at 1.48 and TEEER fair value at 1.50. The Pound to Dollar (GBP/USD) exchange rate has recovered to around 1.3512 after falling as low as 1.3475 during the past 48 hours.
Pound Sterling remains about 0.3% below its opening level on the chart, but UBS's latest valuation calculations suggest the Pound is substantially undervalued against the US Dollar.
Latest — Exchange Rates:
Pound to Dollar (GBP/USD): 1.351039 (+0.20%)
Euro to Dollar (EUR/USD): 1.16235 (+0.33%)
Dollar to Yen (USD/JPY): 155.4649 (-2.18%)
The analysis puts GBP/USD purchasing-power parity at 1.48 and its trend-extrapolated equilibrium exchange rate, or TEEER, at 1.50.
Against a market rate near 1.3512, those figures imply valuation gaps of approximately 9.5% and 11%.
Image: GBP/USD 48hr chart The chart shows GBP/USD sliding from above 1.3550 to 1.3475 before recovering towards 1.3510.
What UBS's 1.48 PPP Estimate Means Purchasing-power parity compares changes in prices between two economies with movements in their exchange rate.
UBS said: “In our calculations we compare how producer prices develop in the currency areas with the way bilateral exchange rates move to determine purchasing power parity (PPP).”
The bank generally uses producer-price data stretching back to 1982.
“Whenever possible, we take producer prices for domestic goods to prevent the exchange rate from directly affecting the inflation rate as much as possible.”
UBS added: “We also take prices for the final stage of production, to avoid commodity price fluctuations from having a major impact on the exchange rate.”
Its 1.48 calculation therefore represents an estimated equilibrium level based on relative prices, rather than a tactical view on the next move in the Pound to Dollar exchange rate.
UBS describes the second measure as follows: “TEEER refers to the 'trend-extrapolated equilibrium exchange rate', which is a three-year projection of PPP”.
That explains why its TEEER estimate is slightly higher at 1.50.
The three-year horizon applies to the projected equilibrium calculation, not to a promise that the market exchange rate will converge to 1.50 over that period.
Fair value is not a deadline.
Currency pairs can trade above or below valuation models for years as interest-rate differences, capital flows, fiscal risks and investor positioning dominate relative-price calculations.
GBP/USD Forecast: Valuation Case Is More Bullish Than UBS Target The difference is easier to see when the figures are compared with UBS's separate directional forecast.
As we covered in our earlier GBP/USD analysis, UBS has also projected a move towards 1.40.
That is a conventional currency forecast and remains well below the 1.48-1.50 valuation area.
Near-term Pound Sterling moves will continue to depend on UK gilt yields, fiscal concerns and Bank of England expectations.
US employment and inflation figures, Federal Reserve rate pricing and broader Dollar demand will also determine whether GBP/USD can move away from the 1.35 region.
Exchange Rates UK Research Our currency coverage draws on live market data, official economic releases and published bank research.
The Pound Sterling rises against the US Dollar on Thursday, as Fed Governor Christopher Waller favors holding the rate unchanged, shifting to a more neutral stance regarding monetary policy, while data showed that the US labour market is solid and that business activity improved. The GBP/USD trades at 1.3535, up 0.37%. Read More...
British Pound gains capped as fiscal, geopolitical risks persistGBP/USD gains after two days of losses, trading around 1.3500 during the European hours on Thursday. The currency pair experiences an upward push as a sharp rally in the Japanese Yen (JPY) weighed heavily on the US Dollar (USD). This sudden Yen surge was largely driven by market speculation that Japanese authorities conducted a rate check, signaling potential direct intervention in foreign exchange markets. Read More...
GBP/USD Price Forecast: Holds a mildly bullish bias near 1.3500 despite subdued RSI momentumThe GBP/USD pair trades in positive territory around 1.3490 during the early European trading hours on Thursday, bolstered by a weaker US Dollar (USD). Traders await the Bank of England (BoE) Governor Andrew Bailey’s speech and US August jobs data later on Friday for fresh impetus. Read More...
Scotiabank’s Global FX Strategy team reports the British Pound (GBP) is flat versus the US Dollar (USD) but softer on crosses, with UK PMI data offering little new insight. Markets price minimal tightening for the September Bank of England (BoE) meeting and modest moves for November. GBP/USD technicals are neutral to bearish, with support around 1.3500–1.3450, though the broader trend from June remains bullish.
Muted BoE expectations cap Pound"GBP/USD (1.3493) The pound is trading flat to the USD while showing minor relative losses against most of the G10 currencies. The UK’s final services and composite PMI’s delivered modest expansionary prints in the low 50s, offering little in terms of the fundamental narrative. "
"BoE Chief Economist Pill is scheduled to speak at 11am ET, offering the potential for headline risk ahead of Gov. Bailey’s speech tomorrow. BoE rate expectations remain muted for the September 17th meeting, with only 4bpts of tightening priced."
"The November 5th meeting is priced for 18bpts and is also an Inflation Report/forecast meeting and thus should provide for a more fulsome analysis as it will also follow the government’s Autumn Statement/budget scheduled for October 28th. UK-US yield spreads remain supportive following this week’s surge."
"Neutral/bearish—the GBP’s technicals remain relatively lackluster with an RSI that is showing signs of stabilization, but at bearish sub-50 levels in the mid-40s. Short-term price action suggests important support at/just below 1.3500, with additional support expected closer to 1.3450. The medium-term trend from June remains bullish however."
(This article was created with the help of an Artificial Intelligence tool and reviewed by an editor. Know more.)
GBP/USD at two-week low: Risk aversion takes holdGBP/USD attempted to rebound from a two-week low of approximately 1.3485 on Thursday. Investors are moving away from riskier assets amid concerns about the economic impact of an energy shock triggered by a fresh escalation in the Middle East.
The market is digesting Prime Minister Andy Burnham’s address to the House of Commons. He reaffirmed the government’s commitment to fiscal discipline and reducing the debt burden. The Prime Minister also noted that bringing forward the budget submission date should help reduce speculation about future fiscal measures. Chancellor John Healy’s first major statement on the government’s programme is expected as early as next week. Read more...
British Pound gains capped as fiscal, geopolitical risks persistGBP/USD gains after two days of losses, trading around 1.3500 during the European hours on Thursday. The currency pair experiences an upward push as a sharp rally in the Japanese Yen (JPY) weighed heavily on the US Dollar (USD). This sudden Yen surge was largely driven by market speculation that Japanese authorities conducted a rate check, signaling potential direct intervention in foreign exchange markets.
Adding to the Greenback's troubles, recent economic data highlighted a slowdown in US private-sector employment for August, where ADP figures showed only 38,000 positions added against an expected 47,000. Despite these cooling labor signals, financial markets are still pricing in roughly a two-thirds probability of a Federal Reserve interest rate hike later this month, leaving traders eagerly awaiting upcoming jobless claims and Friday’s comprehensive payrolls report for clearer policy direction. Read more...
GBP/USD Price Forecast: Holds a mildly bullish bias near 1.3500 despite subdued RSI momentumThe GBP/USD pair trades in positive territory around 1.3490 during the early European trading hours on Thursday, bolstered by a weaker US Dollar (USD). Traders await the Bank of England (BoE) Governor Andrew Bailey’s speech and US August jobs data later on Friday for fresh impetus.
Federal Reserve (Fed) Chair Kevin Warsh delivered unexpectedly hawkish remarks at the Jackson Hole meeting last week, boosting market expectations for a rate hike next month. Warsh pledged to return inflation to the 2% target and indicated rates could rise further. Read more...
GBP/USD attempted to rebound from a two-week low of approximately 1.3485 on Thursday. Investors are moving away from riskier assets amid concerns about the economic impact of an energy shock triggered by a fresh escalation in the Middle East.
The market is digesting Prime Minister Andy Burnham’s address to the House of Commons. He reaffirmed the government’s commitment to fiscal discipline and reducing the debt burden. The Prime Minister also noted that bringing forward the budget submission date should help reduce speculation about future fiscal measures. Chancellor John Healy’s first major statement on the government’s programme is expected as early as next week.
Money markets continue to price in a 25-basis-point Bank of England rate hike before year-end. Those expectations have been reinforced by the recent acceleration in UK retail price inflation.
Additional pressure on GBP/USD is coming from a more hawkish stance by the Federal Reserve. Following Kevin Warsh’s hawkish comments and rising oil prices, the probability of a US rate hike in September is now estimated at approximately 66%, supporting the dollar.
Technical analysis
On the H4 GBP/USD chart, the market has nearly reached the local downside target at 1.3474 and is forming a narrow consolidation range above this level, currently extending up to 1.3510. A downside breakout would open the way for a further decline towards 1.3450. An upside breakout could lead to a correction towards 1.3520, followed by a resumption of the downtrend. The MACD indicator supports this scenario, with its signal line below zero and trending downward, indicating continued downside momentum.
On the H1 chart, the market has formed a tight consolidation range around 1.3495, extending between 1.3478 and 1.3518. A move lower towards 1.3470 is expected, and a break below this level would open the way for a further decline to 1.3450. The Stochastic oscillator supports this scenario, with its signal line below 50 and trending downward towards 20, indicating continued short-term downside pressure.
ConclusionGBP/USD is hovering near a two-week low as risk aversion prevails amid escalating Middle East tensions and a fresh energy shock. The pound has found limited support from Prime Minister Burnham’s reaffirmation of fiscal discipline, with markets awaiting Chancellor Healy’s statement on the government’s programme next week. Meanwhile, expectations of further Bank of England tightening, reinforced by rising inflation, continue to provide some underlying support. However, hawkish signals from the Federal Reserve and elevated oil prices have strengthened the dollar, putting further pressure on the pair. Technically, further downside towards 1.3450 appears likely, while a corrective move towards 1.3520 cannot be ruled out. The near-term direction will depend on US jobs data and geopolitical developments.
GBP/USD attempted to rebound from a two-week low of approximately 1.3485 on Thursday. Investors are moving away from riskier assets amid concerns about the economic impact of an energy shock triggered by a fresh escalation in the Middle East.
The market is digesting Prime Minister Andy Burnham’s address to the House of Commons. He reaffirmed the government’s commitment to fiscal discipline and reducing the debt burden. The Prime Minister also noted that bringing forward the budget submission date should help reduce speculation about future fiscal measures. Chancellor John Healy’s first major statement on the government’s programme is expected as early as next week.
Money markets continue to price in a 25-basis-point Bank of England rate hike before year-end. Those expectations have been reinforced by the recent acceleration in UK retail price inflation.
Additional pressure on GBP/USD is coming from a more hawkish stance by the Federal Reserve. Following Kevin Warsh’s hawkish comments and rising oil prices, the probability of a US rate hike in September is now estimated at approximately 66%, supporting the dollar.
Technical Analysis
On the H4 GBP/USD chart, the market has nearly reached the local downside target at 1.3474 and is forming a narrow consolidation range above this level, currently extending up to 1.3510. A downside breakout would open the way for a further decline towards 1.3450. An upside breakout could lead to a correction towards 1.3520, followed by a resumption of the downtrend. The MACD indicator supports this scenario, with its signal line below zero and trending downward, indicating continued downside momentum.
On the H1 chart, the market has formed a tight consolidation range around 1.3495, extending between 1.3478 and 1.3518. A move lower towards 1.3470 is expected, and a break below this level would open the way for a further decline to 1.3450. The Stochastic oscillator supports this scenario, with its signal line below 50 and trending downward towards 20, indicating continued short-term downside pressure.
Conclusion GBP/USD is hovering near a two-week low as risk aversion prevails amid escalating Middle East tensions and a fresh energy shock. The pound has found limited support from Prime Minister Burnham’s reaffirmation of fiscal discipline, with markets awaiting Chancellor Healy’s statement on the government’s programme next week. Meanwhile, expectations of further Bank of England tightening, reinforced by rising inflation, continue to provide some underlying support. However, hawkish signals from the Federal Reserve and elevated oil prices have strengthened the dollar, putting further pressure on the pair. Technically, further downside towards 1.3450 appears likely, while a corrective move towards 1.3520 cannot be ruled out. The near-term direction will depend on US jobs data and geopolitical developments.
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United Overseas Bank’s (UOB) Quek Ser Leang and Lee Sue Ann note GBP/USD extended its decline to 1.3475 before rebounding, closing at 1.3485. Intraday bias remains lower, but any weakness is seen limited to a test of 1.3465, with 1.3510 marking a shift back to range trading. Over the coming weeks, downside risk persists toward 1.3415, while the broader 1.3210–1.3655 range dominates the 1–3 month outlook.
Pound retains controlled downside bias"24-HOUR VIEW: The following are excerpts from our update yesterday, when GBP was at 1.3515: “Downward momentum is building tentatively, and today we expect GBP to trade with a downside bias, potentially testing the major support at 1.3480 (there is another support level at 1.3500). To sustain the momentum build-up, GBP must hold below 1.3545, with minor resistance at 1.3530.” GBP subsequently dropped to a low of 1.3475, rebounded to 1.3515 before closing 0.23% lower at 1.3485. Although downward momentum has slowed somewhat, the bias for GBP today remains on the downside. However, any decline is likely limited to a test of 1.3465. On the upside, a breach of 1.3510 would indicate that GBP is likely to range-trade rather than trade with a downside bias."
"1-3 WEEKS VIEW: In our most recent narrative from Monday (31 Aug, spot at 1.3540), we highlighted that “the risk for GBP remains on the downside, and the level to watch is 1.3480.” Yesterday, GBP met the technical target, dropping to a low of 1.3475. While the downside risk for GBP remains intact, there has been no clear increase in downward momentum, and it is left to be seen whether the next technical target at 1.3415 is within reach. On the upside, a breach of 1.3545 (‘strong resistance’ level previously at 1.3570) would indicate that the downward pressure from last Friday has eased."
(This article was created with the help of an Artificial Intelligence tool and reviewed by an editor. Know more.)
Key Points:ADP employment rose by 38,000 versus 48,000 expected, reinforcing signs that U.S. hiring momentum is cooling.Friday's Nonfarm Payrolls report is now the crucial test for whether markets maintain elevated September Fed hike expectations.The ECB retains a comparatively hawkish backdrop as higher eurozone inflation keeps further tightening expectations alive.
GBP/USD
+0.13%
GBP/USD ForecastEUR/USD
+0.14%
EUR/USD ForecastUS Dollar News: Soft ADP Data Tests Fed Hike Conviction The greenback has begun the month with its momentum challenged by the more recent labor data. The August ADP report was 38,000 compared to the 48,000 report that economists expected, and also showed a loss of jobs in manufacturing as well as professional and business services. The report supports signs of cooling hiring, and was lower for Treasury yields. Even with the reports, futures still hint at a 60%–65% likelihood of a rate hike in September by the Fed. Fed Chair Kevin Warsh also kept a hawkish stance at Jackson Hole with his speech, keeping expectations of a rate hike high. Friday’s employment data will be the last big report with the potential to change expectations, and a weak report will drop the likelihood of a rate hike.
The euro still supports a firm policy with eurozone inflation reaching 3.3% in August from July’s 2.9%. This increase was largely due to the Iran conflict and the resulting energy costs. The markets have priced in the expected 25 basis point increase with the deposit rate most likely to reach 2.50% for this hike. With core inflation reaching 2.4%, a more cautious slow pace of tightening is expected, rather than a prolonged hiking period.
Sterling is facing the harder of the two domestics. Gilt yields for the ten year have reached their highest level since 2007 at 5.294% with energy costs, inflation, and fiscal concerns and spending all reaching a high prior to the October budget. The BoE is still expected to hold Bank Rate at 3.75% in September, but a 25 basis point hike is expected in the coming year at later dates.
The movement of the FX theme for September 3 is expected to be data-dependent. Soft U.S. hiring diminishes the conviction of the Fed Funds rate hike, and the ECB retains the most compelling case for forward tightening. In the meantime, fiscal stress is holding back GBP, despite higher than desired inflation.
For September 3, the FX theme appears to be increasingly data dependent. Soft U.S. hiring diminishes the conviction of the Fed Funds rate hike, and the ECB maintains the most persuasive case for front-running tightening.
U.S. Dollar Index Technical Analysis: DXY Breaks Rising Structure as 99.12 Support Comes Into Focus Dollar Index Price Chart – Source: Tradingview The U.S. Dollar Indexis currently trading at 99.23 on the 2-hour chart after dropping below the recovering channel from the August lows. What is interesting is how quickly the index was rejected at the 99.80 – 99.86 range. DXY lost 99.62, 99.48, and 99.35 very quickly, which shows how much the structure of the bullish recovery has weakened.
The first area I will be watching is 99.12, as the downwards support zone begins there. Breaking below this would expose 98.90, 98.72, and 98.56. In the opposite direction, looking at the previous support zone of 99.35 – 99.48 and adding 99.62, the resistance zone starts to form there.
RSI has dropped and begun to enter oversold territory, so a bounce in the index is possible, but I also believe that the DXY will drop furtherwhen trading below the 99.48 range. I will reverse that opinion if the index breaks above the 99.62 range, but I believe the rallies will be corrective in nature rather than a strong downtrend.
GBP/USD Technical Analysis: Sterling Bounces From 1.3477 but 1.3526 Resistance Keeps Bears in Control
GBP/USD Price Chart – Source: Tradingview Currently, GBP/USD is trading at the 1.3500 level on the 4-hour chart as price rebounds from the support zone of 1.3477. What I want to point out is that price is bouncing out of a support zone, but is below both moving averages and the 1.3526 support area which is now an area of resistance.
1.3526 is the first resistance area, followed by the resistance area of 1.3565 and 1.3601. Beyond those, resistance is expected to cluster around the area of 1.3656-1.3676. 1.3477 is the next support area, with potential support at 1.3435 and 1.3400 should 1.3477 break.
RSI is recovering from deeply oversold territory. This leads to believing that the pair may continue to climb, however, I am still bias to the below 1.3526 and 1.3565 bearish resistance zone. Should 1.3565 bullish resistance zone break, I will black a resistance call. Until then I believe this is a corrective rally in a weaker bullish short-term trend.
EUR/USD Technical Analysis: Euro Rebounds From 1.1571 but 1.1610–1.1625 Is the Real Test EUR/USD Price Chart – Source: Tradingview EUR/USD is currently trading at 1.1608. The pair has been bought aggressively on the 1.1571 support level, and what has been interesting is how quickly the pair has bounced from oversold levels. That said, the level that is currently more important is the previous support zone and the descending trendline.
The pair has bounced directly into the zone, rather than the bounce itself.
1.161–1.1625 and 1.1659 are immediate resistance level regions currently. Above 1.1659, buyers would be focused on 1.1686 and 1.1711. Sellers continue to define 1.1571 as the first major support level on the downside with 1.1547 and ultimately 1.1517.
RSI recovering in oversold territory favors the bullish scenario. I’m neutral, but I favour market bears, as long as EUR/USD is below 1.1625. A decisive close above 1.1625 would lead me to a more bearish outlook. A retest of the area around 1.1571 would also be of interest.
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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 euro and pound continue to decline, approaching important support levels amid a stronger US dollar. Further moves in EUR/USD and GBP/USD will depend on incoming macroeconomic data, particularly developments in the US labour market.
Today, market attention will focus on economic data from Europe and the US. In the eurozone, services-sector business activity indices will be released, with weaker readings potentially keeping pressure on the euro. In the US, weekly labour-market data will be published, while additional attention will be paid to comments from Federal Reserve representative Christopher Waller. However, tomorrow’s employment report will be the key market reference point. Following the weak ADP reading, further signs of a cooling labour market could strengthen expectations of a more accommodative Fed policy and put pressure on the dollar, while stronger figures could support further dollar gains.
For the pound, domestic data and signals from the Bank of England will provide an additional point of reference. Services-sector business activity figures will be in focus, along with a speech by Bank of England Governor Andrew Bailey, whose comments could influence expectations for the central bank’s future policy.
EUR/USD As expected, EUR/USD has tested the important 1.1580–1.1620 support area. The decline has so far slowed near the upper boundary of the 1.1520–1.1560 range formed in August. Weak eurozone data could push EUR/USD further into this range. A return above 1.1620, followed by a sustained move above this level, would weaken the current bearish scenario and create conditions for a corrective recovery.
Key events for EUR/USD:
today at 10:15 (GMT+3): Spain Services Purchasing Managers’ Index (PMI); today at 10:55 (GMT+3): Germany Composite Purchasing Managers’ Index (PMI); today at 15:30 (GMT+3): US initial jobless claims.
GBP/USD GBP/USD continues to play out the bearish “tower” pattern described earlier. A sustained move below the important 1.3500 support level keeps the risk of further declines towards the 1.3400–1.3440 area. A rebound from this zone could trigger a corrective recovery, while the bearish scenario could be considered invalidated after a sustained move above 1.3560.
Key events for GBP/USD:
today at 11:30 (GMT+3): UK Services Purchasing Managers’ Index (PMI); today at 17:00 (GMT+3): US ISM Non-Manufacturing Purchasing Managers’ Index; tomorrow at 11:50 (GMT+3): speech by Bank of England Governor Andrew Bailey.
Overall, EUR/USD and GBP/USD remain in a downtrend near important support levels, although their further direction will depend on incoming macroeconomic data. Following the weak ADP report, tomorrow’s US employment report will be the key reference point. Further signs of cooling in the labour market could increase pressure on the dollar, while stronger figures could support further dollar gains and lead to continued declines in both currency pairs.
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The GBP/USD pair trades in positive territory around 1.3490 during the early European trading hours on Thursday, bolstered by a weaker US Dollar (USD). Traders await the Bank of England (BoE) Governor Andrew Bailey’s speech and US August jobs data later on Friday for fresh impetus.
Federal Reserve (Fed) Chair Kevin Warsh delivered unexpectedly hawkish remarks at the Jackson Hole meeting last week, boosting market expectations for a rate hike next month. Warsh pledged to return inflation to the 2% target and indicated rates could rise further.
“The emphasis on inflation risks, together with Warsh’s explicit commitment to achieving price stability and his reluctance to pre-commit to future policy actions, reinforces the elevated risks of policy tightening this year, although it could also be the case of talking without action, said UOB analysts.
On the UK’s front, BoE policymaker Catherine Mann said that the UK economy had shown signs of stronger growth since the last monetary policy meeting. Mann added that the labour market had stabilised and inflation had been a little stronger than expected.
Financial markets on Tuesday were fully pricing a BoE rate hike by the end of the year but only around 15% odds of a rate increase at the September policy meeting, according to Reuters.
Pound sentiment steady as UK politics offer few fresh cuesStrategists at Scotiabank note that the domestic political backdrop remains quiet, with “political developments… equally limited, offering little to market participants in search of domestic drivers.” They “continue to highlight the importance of sentiment – specifically, politically-related sentiment – in driving the recent strength in the Pound following the arrival of PM Burnham in late June,” even as the current lack of new policy signals leaves investors with fewer fresh catalysts to trade on.
Technical Analysis: GBP/USD retains a mildly bullish tone above the 100-day SMAIn the daily chart, GBP/USD maintains a mildly bullish near-term bias as it holds above the 100-day Simple Moving Average (SMA) and the lower Bollinger band, suggesting underlying demand on dips. However, price remains capped beneath the Bollinger middle band, while the latest 14-day Relative Strength Index at 46.8 points to subdued momentum rather than a strong trending move.
On the topside, initial resistance is located at the Bollinger middle band at 1.3550. A stronger barrier is seen at the May 8 high of 1.3637, en route to the upper Bollinger band near 1.3665.
On the downside, the key support level to watch emerges at the 100-day SMA and the lower Bollinger band of 1.3440, forming a tight demand zone that would need to give way to signal a deeper corrective phase. A decisive break below this level could expose the July 13 low of 1.3342.
(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.
Pound-Dollar could remain under pressure if US services data and payrolls reinforce Fed hike bets, while Bailey risks limiting Sterling support. The Pound US Dollar (GBP/USD) exchange rate edged lower on Wednesday, striking its worst levels since mid-August as a global bond selloff gripped markets.
At the time of writing, GBP/USD was trading at around $1.3477. Down around 0.3% from Wednesday’s opening levels.
Latest — Exchange Rates:
Pound to Dollar (GBP/USD): 1.349002 (-0.18%)
Euro to Dollar (EUR/USD): 1.15875 (-0.03%)
Dollar to Yen (USD/JPY): 158.6891 (-0.94%)
DAILY RECAP:
The US Dollar (USD) firmed against the majority of its peers on Wednesday as the ongoing turmoil in global bond markets saw investors favour the safe-haven currency.
Rising energy prices, persistent inflation concerns and mounting fiscal pressures have driven government bond yields sharply higher across the globe, with many countries now grappling with borrowing costs at multi-month highs amid expectations that most central banks will be forced to tighten monetary policy in the coming months.
Renewed expectations for a Federal Reserve’s interest rate hike later this month is also boosting USD demand, with the odds of a September hike having risen to around 70% since last week.
The Pound (GBP) struggled to attract support on Wednesday as the wider global bond rout sent domestic borrowing costs soaring.
The benchmark 10-year gilt yield hovered at levels not seen since 2008, whilst the 30-year yield pushed to its highest levels since 1998.
While the sell-off reflects a wider international trend, the escalation in UK yields carries unique risks for Westminster. With Chancellor John Healey finalising his Autumn Budget for next month, steeper financing costs threaten to severely erode the Treasury's fiscal headroom and restrict government spending plans.
Near-Term GBP/USD Forecast: Robust US Services PMI to Boost the 'Greenback' Looking ahead, the next catalyst of movement for the Pound to US Dollar (GBP/USD) exchange rate will be the publication of the latest ISM services PMI.
August's index could help to underpin the 'Greenback' as it's expected to report an acceleration in the US service sector.
Although any resulting movement in USD may be modest as markets await the publication of the latest non-farm payroll report at the end of the session.
For GBP investors, the focus in the second half of the week will be on Bank of England (BoE) Governor Andrew Bailey as he delivers a scheduled speech on Friday.
Bailey could sap Sterling sentiment if he retains his recent cautious bias regarding monetary tightening, as it could dampen bets the BoE will deliver a rate hike later this year.
Exchange Rates UK Research Our currency coverage draws on live market data, official economic releases and published bank research.
Scotiabank strategists Shaun Osborne and Eric Theoret describe GBP/USD as soft but mid-pack within the G10, with domestic data and Bank of England (BoE) events limited ahead of Governor Bailey’s speech. They stress the role of political sentiment under PM Burnham in prior Pound strength, now challenged by higher Oil prices. Technically, the break of 1.35 refocuses attention on support in the mid‑1.34s and 1.33.
Political sentiment and Oil weigh on Pound"The GBP is soft, down 0.3% vs. the USD but still a mid-performer among the G10 in an environment of broad-based USD strength. Domestic releases have been limited and the BoE calendar is empty ahead of Friday’s speech from Gov. Bailey."
"Political developments have been equally limited, offering little to market participants in search of domestic drivers. We continue to highlight the importance of sentiment – specifically, politically-related sentiment – in driving the recent strength in the pound following the arrival of PM Burnham in late June."
"The shift had been clearly observed in risk reversals as the options market had faded its premium for protection against downside risk. However the latest surge in oil prices appears to be eroding this key source of support, and riskies are once again pricing a higher premium for downside protection. "
"Neutral/bearish – the RSI’s plunge into bearish territory has been swift however the momentum indicator is already in the mid-40s and spot’s defensive price action suggests little scope for near-term stabilization."
(This article was created with the help of an Artificial Intelligence tool and reviewed by an editor. Know more.)
Orbex Group Limited is the holding company of Orbex Global Limited, Orbex Limited is an affiliate with Orbex Global Limited. Orbex Global Limited is authorized and regulated by Mauritius Financial Services Commission “FSC” (View License). Orbex.com is owned by Orbex Group Limited and is operated by Orbex Global Limited with registered address: Ground Floor, The Catalyst, Silicon Avenue, 40 Cybercity, 72201 Ebène, Republic of Mauritius
Risk Warning: Trading foreign exchange on margin carries a high level of risk, and may not be suitable for all investors. Before deciding to trade foreign exchange, you should carefully consider your investment objectives, level of experience, and risk appetite. There is a possibility that you may sustain a loss of some or all of your investment and therefore you should not invest money that you cannot afford to lose. You should be aware of all the risks associated with foreign exchange trading, and seek advice from an independent financial advisor if you have any doubts. Orbex Global does not offer its services to residents of certain jurisdictions such as Mauritius, USA, and North Korea.
The British Pound (GBP) is down 0.1% to near 1.3500 against the US Dollar (USD) during the European trading session on Wednesday. The GBP/USD pair drops as the US Dollar extends its advance, with market participants pricing in a 25 basis points (bps) interest rate hike by the Federal Reserve (Fed) in the policy meeting this month.
At the time of writing, the US Dollar Index (DXY), which gauges the Greenback’s value against six major currencies, trades 0.13% higher to near 99.78. Read more...
British Pound declines to near 1.3500 as US-Iran tensions riseThe GBP/USD pair declines to near 1.3500 during the early European trading hours on Wednesday. Ongoing tensions in the Middle East provide some support to a safe-haven currency such as the US Dollar (USD) against the British Pound (GBP). All eyes will be on the US August jobs report later on Friday.
CNBC reported that the US and Iran traded a new round of attacks Tuesday, with American forces striking Iranian targets around the critical waterway and Tehran saying it had launched a retaliatory operation targeting US interests across the region. Read more...
GBP/USD Price outlook: British Pound/US Dollar navigating between arc levelsOverview: Based on Arc Cycle Analysis applied to the 30m chart, British Pound/U.S. Dollar is trading between the 0.5 Arc and 0.382 Arc within the current Arc Cycle. Price has cleared the 0.5 Arc boundary and is progressing toward the 0.382 Arc, suggesting continued movement toward the next Arc boundary.
Price is trading between the 0.5 Arc and the 0.382 Arc, indicating that the market is progressing through the current Arc Cycle toward the next Arc boundary. If momentum continues, the preferred scenario is continued movement toward the target 1.3527 price. Read more...
UOB’s Quek Ser Leang and Lee Sue Ann note GBP/USD broke below its anticipated intraday range, dropping to 1.3507 as downside momentum starts to build. Intraday, they expect a bearish bias with potential tests of 1.3500 and the major 1.3480 support, provided prices stay below 1.3545. Over one to three weeks, they keep a downside risk focus, with 1.3480 as the key level unless 1.3570 resistance is breached.
Pound under pressure toward support"24-HOUR VIEW: GBP traded between 1.3531 and 1.3565 two days ago and closed little changed at 1.3549 (+0.06%). Yesterday, we stated that “the price movements appear to be part of a range-trading phase,” and we were of the view that GBP “could trade in a higher range of 1.3535/1.3570 today.” However, instead of trading in a range, GBP declined to a low of 1.3507. Downward momentum is building tentatively, and today we expect GBP to trade with a downside bias, potentially testing the major support at 1.3480 (there is another support level at 1.3500). To sustain the momentum build-up, GBP must hold below 1.3545, with minor resistance at 1.3530."
"1-3 WEEKS VIEW: Our update from Monday (31 Aug, spot at 1.3540) still stands. As highlighted, “the risk for GBP remains on the downside, and the level to watch is 1.3480.” On the upside, a breach of 1.3570 (‘strong resistance’ level previously at 1.3600) would indicate that the downward pressure from last Friday has eased. "
(This article was created with the help of an Artificial Intelligence tool and reviewed by an editor. Know more.)
DXY strengthens as Iran escalation lifts inflation risks and Fed hike bets, while EUR/USD and GBP/USD extend their bearish breakdowns.
In this article:GBP/USD
-0.09%
GBP/USD ForecastEUR/USD
-0.07%
EUR/USD ForecastUS Dollar News: Iran Escalation and Fed Hike Bets Lift Dollar Beginning September 2, the dollar will be stronger against multiple currencies due to new concerns arising from Iran dealing with the U.S. including the price of oil, inflation and increases in bond yields. Before the start of trading most markets set the probability of a rate hike by the Fed in September as 68%. It is clear that the market believes Warsh’s speech, the uncertainty of inflation, and an energy shock combined with the price of oil going up, have all added to the hawkish sentiments that are influencing this decision. In the U.S., data has been coming in below expectations, but this has not mattered because the market has other concerns, such as demand for safe haven currencies and the risk of inflation.
Dollar jumps against Euro due to strong inflation numbers. The inflation data from the Eurozone shows core inflation was 2.4%, while headline inflation was 3.3% with energy inflation at 14.3%. This far exceeds the inflation numbers from last year. This has increased the expectation for the European Central Bank to increase the deposit rate to 2.50% and rate hikes are expected when they meet next week.
Most expect interest rates will remain unchanged in the U.K. Also like in the Eurozone, the BoE has been dealing with higher inflation. The BoE has been able to address inflation and weaker labor market conditions, but new concerns have been the increased use of the Bank of England’s long-term repo facility. On August 18, the BoE noted the use of this facility called Level C collateral, which is higher risk, had been used the most since 2020.
For September 2, synchronized tightening pressure is the main FX theme. The dollar should benefit from a combination of an upward shift in Fed hike expectations and safe-haven flows. Meanwhile, the euro should benefit from an ECB rate hike while Sterling should continue to feel pressure from both inflation and weaker domestic financial conditions.
U.S. Dollar Index Technical Analysis: DXY Reclaims 99.34 Support and Pushes Toward 99.90 Dollar Index Price Chart – Source: Tradingview The US Dollar Index is currently trading at 99.76 with price action continuing its rally from the 99.34 – 99.40 support region. Buyers clearly defended this region and pushed price above both the moving averages, showing a much stronger recovery from the previous consolidation.
I am currently long the US dollar Index. Looking for 99.90 as the next level of interest.
DXY has breached 99.57 and is trading up toward the 99.90 level. Currently, 100.09 is the next major resistance zone. If the bullish pressure continues, the price may cross the next resistance levels of 100.25 and 100.39. On the bearish side, I’ll be watching the support levels of 99.73, 99.57, and the major support zone of 99.34 to 99.40.
RSI is around neutral territory, which suggests bullish recovery potential. I’ll remain bullish so long as DXY trades above the 99.57 level, and especially above the 99.34 level. A break below the 99.34 level may signal that the recovery has failed.
GBP/USD Technical Analysis: Sterling Extends Breakdown as 1.3481 Support Comes Into Focus
GBP/USD Price Chart – Source: Tradingview Currently trading at 1.3501, GBP/USD continues its decline from the resistance level of 1.3656-1.3676. I should say here that there was no correction. Rather, sterling violation of the channel, both moving averages, and the trend of lower highs and lower lows continues. What this means is that weakness is structural, not just a correction.
The area of interest now is 1.3481, which currently provides support, but may attract some short term selling. Should that level be broken, then sellers should be looking for support at 1.3435 and 1.3400. Resistance now is around 1.3526 and extends to 1.3565 and 1.3601.
The RSI is currently in oversold territory, so I can’t just dismiss a rebound from 1.3481. However, I still favor a bearish position as long as GBP/USD is below 1.3565. A move above 1.3601 would force me to change my mind on that position. However, I still favor a bearish position. Until then, I favor a bearish position.
EUR/USD Technical Analysis: Euro Loses Rising Trendline as 1.1571 Becomes the Key Line I’m Watching EUR/USD Price Chart – Source: Tradingview The Euro is currently trading just above the 1.1578 level on the 2-hour chart after breaking beneath the trendline that supported theEA rise. I want to highlight that the pair lost the 1.1625 level and fell beneath the two short term moving averages as support broke. This shows that the recent euro bullish structure has weakened.
The first level that I am watching is 1.1571. The level is just above the current price. The RSI is already in oversold territory which would give buyers the opportunity to defend the level. If 1.1571 breaks, then the levels of interest are 1.1547 and 1.1522. If price action continues to head higher then the resistance levels are 1.1600-1.1625 and above that 1.1659.
I am currently more bearish as long as the price action remains beneath 1.1625. This would change if price action moves higher and closes above the 1.1625 level and the falling trend line. For now, all rallies should be expected to be more corrective in nature with 1.1571 being the main breakout level to watch.
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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.
Pound-Dollar could push higher if US employment stays weak, although renewed geopolitical tensions may keep safe-haven Dollar demand firm. The Pound US Dollar (GBP/USD) exchange rate rebounded through the second half of Tuesday's session following the release of underwhelming US economic data.
At the time of writing, GBP/USD was trading at around $1.3551. Virtually unchanged from Tuesday’s opening levels.
Latest — Exchange Rates:
Pound to Dollar (GBP/USD): 1.352393 (-0.18%)
Euro to Dollar (EUR/USD): 1.15886 (-0.25%)
Dollar to Yen (USD/JPY): 160.13862 (+0.24%)
DAILY RECAP:
The US Dollar (USD) initially ticked higher on Tuesday, with the safe-haven currency attracting support amid fresh hostilities between the US and Iran.
The tit-for-tat strikes were the first overtly hostile action taken by either side in several weeks and triggered a fresh jump in oil prices.
However, the US Dollar struggled to sustain these gains for long, with the currency falling back through the second half of the European session with the release of two key US economic indicators.
Both last month's ISM manufacturing PMI and July's JOLTs job opening data printed below forecasts, with the latter proving particularly disappointing to USD investors as signs of a slowing US labour market calls into question bets for future Federal Reserve interest rate hikes.
The Pound (GBP) traded sideways against most major rivals on Tuesday, as London traders returned from the bank holiday to a sharp surge in UK borrowing costs, with benchmark 10-year gilt yields climbing to around 5.24%, their highest levels since 2008.
The move was fuelled by higher crude oil prices and resurfacing inflation anxieties, which reinforced bets that central banks like the Bank of England (BoE) will be forced to keep interest rates higher for longer.
At the same time, an upward revision to August's UK manufacturing PMI offered little support, passing largely unnoticed by currency markets.
Near-Term GBP/USD Forecast: Soft Employment Numbers to Weigh on the 'Greenback'? Looking ahead, the primary catalyst of movement for the Pound to US Dollar (GBP/USD) exchange rate on Wednesday may be the publication of the latest US ADP employment figures.
August's data is forecast to show employment growth remains sluggish, potentially weighing on the US Dollar as it dampens expectations for Friday's more influential payrolls data.
Meanwhile, with no major UK economic releases on the immediate horizon, Sterling's trajectory through the middle of the week will be primarily driven by wider currency market trends.
Exchange Rates UK Research Our currency coverage draws on live market data, official economic releases and published bank research.
GBP/USD failed to surpass 1.3675 and started a downside correction. It traded below a major bullish trend line with support at 1.3570 on the 4-hour chart. WTI Crude Oil prices started a fresh surge and surpassed $88.00. EUR/USD started consolidating losses above the 1.1550 support. GBP/USD Technical Analysis The British Pound struggled near 1.3675 and dipped against the US Dollar. GBP/USD traded below 1.3620 and 1.3600 to enter a short-term bearish zone.
Looking at the 4-hour chart, the pair traded below a major bullish trend line with support at 1.3570. The bears pushed the pair toward the 38.2% Fib retracement level of the upward move from the 1.3273 swing low to the 1.3675 high.
The pair even settled below the 100 simple moving average (red, 4-hour). If there are more losses, the pair might find bids near 1.3520.
The first major support could be near 1.3480 and the 200 simple moving average (green, 4-hour) or the 50% Fib retracement level. A downside break and close below 1.3480 might start a major leg down. In the stated case, the bears could aim for a move to 1.3425. Any more losses could open the door for a test of 1.3350.
On the upside, GBP/USD could face resistance near the 1.3580 level. The next major resistance might be 1.3600. A close above 1.3600 could start another steady increase. In the stated case, the bulls could aim for a move to 1.3620. Any further gains might open the door for a test of 1.3650.
Looking at WTI Crude Oil prices, the price gained bullish pace, and the bulls could now aim for a move toward the $92.00 level.
Upcoming Key Economic Events:
Fed’s Beige Book. US ADP Employment Change for August 2026 – Forecast 48K, versus 44K previous.
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The Pound Sterling trades sideways versus the US Dollar on Tuesday after a tranche of US economic data was mixed, with business activity dipping in August, while a strong jobs market justified Fed Chair Warsh's hawkish tilt. The GBP/USD trades at 1.3540, down a modest 0.06%. Read More...
GBP/USD Price Forecast: Declines below 1.3550, while maintaining bullish bias above 100-day SMAThe GBP/USD pair trades in negative territory around 1.3545 during the early European trading hours on Tuesday. Federal Reserve (Fed) Chair Kevin Warsh’s hawkish remarks at the Jackson Hole symposium underpin the US dollar (USD) against the British Pound (GBP). Read More...
British Pound softens to near 1.3550 on geopolitical tensions, hawkish Fed betsThe GBP/USD pair trades with mild losses around 1.3550 during the early Asian trading hours on Tuesday. The US Dollar (USD) edges higher against the British Pound (GBP) amid ongoing Middle East tensions and Federal Reserve (Fed) Chair Kevin Warsh's hawkish remarks at the Jackson Hole symposium. Read More...
GBP/USD Price Forecast: Declines below 1.3550, while maintaining bullish bias above 100-day SMAThe GBP/USD pair trades in negative territory around 1.3545 during the early European trading hours on Tuesday. Federal Reserve (Fed) Chair Kevin Warsh’s hawkish remarks at the Jackson Hole symposium underpin the US dollar (USD) against the British Pound (GBP).
Warsh said on Friday during his first Jackson Hole speech that with inflation “running above our 2 percent target, the Fed’s predominant focus right now should be ’that underlying inflation is moving to our objective, clearly, and at sufficient speed … otherwise, we have work to do.” Read more...
British Pound softens to near 1.3550 on geopolitical tensions, hawkish Fed betsThe GBP/USD pair trades with mild losses around 1.3550 during the early Asian trading hours on Tuesday. The US Dollar (USD) edges higher against the British Pound (GBP) amid ongoing Middle East tensions and Federal Reserve (Fed) Chair Kevin Warsh's hawkish remarks at the Jackson Hole symposium.
US President Donald Trump on Monday threatened to forcefully strike Iran after the US and Iran exchanged fire for the first time in a month. Meanwhile, Iran's Revolutionary Guard Corps (IRGC) said it targeted US military bases in the two Middle Eastern countries in response to the first US strikes on Iran in weeks. Read more...
Orbex Group Limited is the holding company of Orbex Global Limited, Orbex Limited is an affiliate with Orbex Global Limited. Orbex Global Limited is authorized and regulated by Mauritius Financial Services Commission “FSC” (View License). Orbex.com is owned by Orbex Group Limited and is operated by Orbex Global Limited with registered address: Ground Floor, The Catalyst, Silicon Avenue, 40 Cybercity, 72201 Ebène, Republic of Mauritius
Risk Warning: Trading foreign exchange on margin carries a high level of risk, and may not be suitable for all investors. Before deciding to trade foreign exchange, you should carefully consider your investment objectives, level of experience, and risk appetite. There is a possibility that you may sustain a loss of some or all of your investment and therefore you should not invest money that you cannot afford to lose. You should be aware of all the risks associated with foreign exchange trading, and seek advice from an independent financial advisor if you have any doubts. Orbex Global does not offer its services to residents of certain jurisdictions such as Mauritius, USA, and North Korea.
British Pound/US Dollar (GBP/USD): Arc cycle analysis
Overview: Based on Arc Cycle Analysis applied to the 30m chart, British Pound/U.S. Dollar is trading between the 0.5 Arc and 0.382 Arc within the current Arc Cycle. Price has cleared the 0.5 Arc boundary and is progressing toward the 0.382 Arc, suggesting continued movement toward the next Arc boundary.
vc
Reading
Market Bias
Bearish
Preferred Scenario
Potential Continuation / Cycle-to-Cycle Expansion
Primary Target Zone
1.3527
Scenario Invalidation
Sustained close back above 1.3560
Current Arc Level
In Transit Between Arcs (0.5 Arc to 0.382 Arc)
Cycle Status
Mid-Cycle Migration Phase
Arc Integrity
Neutral
Market outlookPrice is trading between the 0.5 Arc and the 0.382 Arc, indicating that the market is progressing through the current Arc Cycle toward the next Arc boundary. If momentum continues, the preferred scenario is continued movement toward the target 1.3527 price.
Conversely, a sustained 30m close back above 1.3560 would invalidate the continuation scenario and could shift the outlook toward the Previous Arc Cycle.
The Pound to Dollar (GBP/USD) exchange rate traded around 1.3547 on Monday after last week's Dollar rebound knocked Sterling back from six-month highs.
Friday's US employment report should determine whether that correction extends.
Latest — Exchange Rates:
Pound to Dollar (GBP/USD): 1.355175 (+0.13%)
Euro to Dollar (EUR/USD): 1.161853 (+0.31%)
Dollar to Yen (USD/JPY): 159.75691 (-0.22%)
WEEKLY RECAP:
GBP/USD climbed above 1.3640 early last week before coming under sustained pressure, ending Friday at 1.3534.
The Dollar strengthened after Federal Reserve Chair Kevin Warsh used his Jackson Hole speech to underline continued concern over underlying inflation.
Markets subsequently raised the probability of a September rate increase, while Barclays switched its forecast to two further Fed hikes this year.
MUFG economists described Warsh's message as hawkish, but added: “Overall, the speech was hawkish, but this is not new for Warsh.”
There remains disagreement over whether the Fed will actually deliver.
ING's Francesco Pesole said: “we remain reasonably confident in our call for the Fed to hold on 16 September and, by extension, in a weaker dollar.”
The Dollar edged lower again on Monday as traders looked towards this week's data.
Sterling has its own policy uncertainty.
BoE hike expectations softened last week, but recovering UK-US yield spreads have helped limit Pound selling.
Scotiabank noted that the recovery was “offering fundamental support” to Sterling, while its strategists continue to see the broader Dollar trend as lower.
Near-Term GBP/USD Forecast: US Payrolls Hold the Key Tuesday brings UK manufacturing PMI and mortgage approvals, while US ISM manufacturing and JOLTS vacancies should provide the first important Dollar tests.
Wednesday's ADP employment report is followed on Thursday by UK services PMI, US jobless claims and ISM services.
Friday combines UK construction PMI and a speech from BoE Governor Andrew Bailey with the crucial US payroll report.
Non-farm employment is forecast to increase by 55,000, unemployment to remain at 4.1% and hourly earnings to rise 0.3%.
Weak payrolls could return GBP/USD towards 1.3650.
Stronger hiring and hawkish Bailey caution would expose 1.3450.
Exchange Rates UK Research Our currency coverage draws on live market data, official economic releases and published bank research.
United Overseas Bank’s (UOB) Quek Ser Leang and Lee Sue Ann note that GBP/USD remains in a short-term range after last week’s sharp drop, with intraday trade expected between 1.3535 and 1.3570. Despite deeply oversold conditions limiting sustained declines, they still see downside risk toward 1.3480 over the next 1–3 weeks, as long as the British Pound (GBP) stays below 1.3600. Longer-term, the pair is seen range-trading.
Pound holds range but bias still lower"24-HOUR VIEW: After GBP fell sharply to a low of 1.3527 last Friday, we indicated yesterday that “conditions remain deeply oversold, and further sustained decline appears unlikely.” We also highlighted that GBP “may edge lower, but any decline should remain within a range of 1.3520/1.3570.” GBP subsequently traded between 1.3531 and 1.3565, closing little changed at 1.3549 (+0.06%). The price movements appear to be part of a range-trading phase. That said, the firmer underlying tone suggests GBP could trade in a higher range of 1.3535/1.3570 today."
"1-3 WEEKS VIEW: While we highlighted last Friday (28 Aug, spot at 1.3595) that GBP “could edge lower,” we were of the view that “any decline could be contained within a 1.3550/1.3645 range.” After GBP dropped to a low of 1.3527, we highlighted yesterday (31 Aug, spot at 1.3540) that “the risk remains on the downside, and the level to watch is 1.3480.” We will continue to hold the same view as long as GBP holds below 1.3600 (no change in ‘strong resistance’ level)."
(This article was created with the help of an Artificial Intelligence tool and reviewed by an editor. Know more.)
Dollar Index Price Chart – Source: Tradingview The U.S. Dollar Index is currently trading at 99.47 on the 4 hour chart after pulling back from the 99.73 region. Currently, price is holding the 38.2% Fibonacci level at 99.49 with the 50% retracement at 99.41, and the 61.8% level at 99.34 below. For now, the broader recovery structure is intact, but DXY must clear the resistance band before we can expect the upside to accelerate.
Immediate resistance sits at 99.58, 99.73, 99.90, and 100.07. On the contrary, support remains at 99.41 to 99.34 and then at 99.10 and 98.92. Above all, the rising trendline from the recent lows preserves the overall recovery structure.
RSI is currently at the mid 50s, showing neutral to positive momentum. DXY, for now, stays in the bullish territory, and a move above 99.58 would be constructive to the bullish case targeting 99.73 to 99.90 levels. However, breaking the 99.34 level would affect the recovery structure and call for a move towards 99.10.
GBP/USD Technical Analysis: Pound Stabilizes Near 1.3548 but Broken Channel Keeps Pressure on Bulls
The GBP/USD pair trades in negative territory around 1.3545 during the early European trading hours on Tuesday. Federal Reserve (Fed) Chair Kevin Warsh’s hawkish remarks at the Jackson Hole symposium underpin the US dollar (USD) against the British Pound (GBP).
Warsh said on Friday during his first Jackson Hole speech that with inflation “running above our 2 percent target, the Fed’s predominant focus right now should be ’that underlying inflation is moving to our objective, clearly, and at sufficient speed … otherwise, we have work to do.”
Expectations of a September Fed rate hike rose to 65.4% from below 40%, according to the CME FedWatch tool. Economists said the key determinant could be what the next round of inflation data reveals.
BoE tightening expectations build as markets eye UK budgetStrategists at Scotiabank highlight that market pricing has turned more constructive on BoE tightening prospects, with investors currently assigning “a ~60% chance of a 25bpt at the next BoE meeting on September 16” and “a cumulative 36bpts of tightening by year-end.” They add that, in terms of sentiment, “the October 28 budget” will be crucial, noting it “will remain a key focus for markets over the next coupld of months” as investors assess the UK’s fiscal stance alongside the evolving policy outlook.
Warsh flags unfinished inflation fight, keeps Dollar bulls alertFed Chair Warsh delivered a notably hawkish-leaning message, with a 7.4/10 FXS Speechtracker score standing above the 6.5/10 historical average and underscoring elevated concern on price stability. The insistence that the Fed must be “confident underlying inflation is moving to objective, or we have work to do,” combined with the view that financial conditions are not restrictive and credit markets show few signs of policy restraint, points to a bias toward further tightening or at least a higher-for-longer stance. Warsh’s emphasis that recent better inflation prints do not yet signal a meaningful change in underlying trends, alongside a firm commitment to the 2% PCE target, reinforces a tone that is supportive for the Dollar and broadly negative for risk-sensitive assets.
The FXS Fed Sentiment Index was unchanged, moving 0.00 points to a still-elevated level of 129.70, which keeps the policy narrative firmly in hawkish territory despite the lack of incremental shift. The combination of a stronger-than-baseline FXS Speechtracker score and a high FXS Fed Sentiment Index level suggests markets will continue to price persistent Fed vigilance on inflation, with implications for Dollar strength and higher front-end yields.
Technical Analysis: GBP/USD retains a bullish vibe above the 100-day SMAIn the daily chart, GBP/USD sits above both the 100-day moving average (MA) and the lower Bollinger Band, keeping the near-term bias mildly bullish as price holds within the upper half of the recent volatility envelope. The Relative Strength Index (14) reading around 52 suggests neutral-to-positive momentum, hinting that buyers retain a slight advantage but lack strong conviction.
On the topside, initial resistance is located at the Bollinger middle band around 1.3550, followed by the upper Bollinger Band at 1.3668. A sustained break would open the way for 1.3700, representing the February 9 high and psychological level.
On the downside, first support is seen at the August 28 low of 1.3526. The next contention level is located at the 100-day MA near 1.3445, with the lower Bollinger Band at 1.3432 reinforcing this demand area; a daily close below this zone would weaken the current constructive tone and expose deeper losses within the broader range.
(The technical analysis of this story was written with the help of an AI tool. Know more.)
Pound Sterling FAQs The Pound Sterling (GBP) is the oldest currency in the world (886 AD) and the official currency of the United Kingdom. It is the fourth most traded unit for foreign exchange (FX) in the world, accounting for 12% of all transactions, averaging $630 billion a day, according to 2022 data. Its key trading pairs are GBP/USD, also known as ‘Cable’, which accounts for 11% of FX, GBP/JPY, or the ‘Dragon’ as it is known by traders (3%), and EUR/GBP (2%). The Pound Sterling is issued by the Bank of England (BoE).
The single most important factor influencing the value of the Pound Sterling is monetary policy decided by the Bank of England. The BoE bases its decisions on whether it has achieved its primary goal of “price stability” – a steady inflation rate of around 2%. Its primary tool for achieving this is the adjustment of interest rates. When inflation is too high, the BoE will try to rein it in by raising interest rates, making it more expensive for people and businesses to access credit. This is generally positive for GBP, as higher interest rates make the UK a more attractive place for global investors to park their money. When inflation falls too low it is a sign economic growth is slowing. In this scenario, the BoE will consider lowering interest rates to cheapen credit so businesses will borrow more to invest in growth-generating projects.
Data releases gauge the health of the economy and can impact the value of the Pound Sterling. Indicators such as GDP, Manufacturing and Services PMIs, and employment can all influence the direction of the GBP. A strong economy is good for Sterling. Not only does it attract more foreign investment but it may encourage the BoE to put up interest rates, which will directly strengthen GBP. Otherwise, if economic data is weak, the Pound Sterling is likely to fall.
Another significant data release for the Pound Sterling is the Trade Balance. This indicator measures the difference between what a country earns from its exports and what it spends on imports over a given period. If a country produces highly sought-after exports, its currency will benefit purely from the extra demand created from foreign buyers seeking to purchase these goods. Therefore, a positive net Trade Balance strengthens a currency and vice versa for a negative balance.
The Pound Sterling advances during the North American session, up a modest 0.09%, as the Greenback edges lower despite last Friday’s hawkish remarks from Fed Chair Warsh, ahead of a packed week of economic data from the United States (US). The GBP/USD trades at 1.3549. Read More...
GBP/USD Price Forecast: Finds ground slightly below 20-day EMAThe British Pound (GBP) is marginally higher at around 1.3545 against the US Dollar (USD) during the European trading session on Monday. The GBP/USD pair rebounds as the US Dollar corrects after a strong upside move on Friday. Read More...
British Pound holds losses amid geopolitical tensions, Fed tightening hopesThe British Pound (GBP) edges up on Monday but remains close to two-week lows against the US Dollar (USD). Risk aversion amid fresh hostilities between the US and Iran and rising bets that the US Federal Reserve (Fed) might finally hike rates in September are keeping the Greenback's dips subdued at the start of the week. Read More...
GBP/USD drops to 1.3542, breaking below the 1.3550 level and both EMAs, after declining steadily from the 1.3680 area. Source: TradingView. The British pound, I think, is probably going to be somewhat range-bound, mainly because the British pound, of course, has a higher interest rate attached to it. So, it is a little insulated from US dollar strength, and I think most of the reaction was more about the US dollar than anything else.
I wouldn’t read too much into British pound weakness, because at this point in time, even if I want to buy the US dollar, I am going to short other currencies, weaker currencies.
The British pound for me is what I want to buy if the US dollar starts to roll over. Right now, it looks pretty weak, so while shorting the pound could be possible in this general vicinity, the reality is we will probably get more mileage out of other currencies.
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The British Pound (GBP) is marginally higher at around 1.3545 against the US Dollar (USD) during the European trading session on Monday. The GBP/USD pair rebounds as the US Dollar corrects after a strong upside move on Friday.
As of writing, the US Dollar Index (DXY), which gauges the Greenback’s value against six major currencies, trades 0.15% lower to near 99.53. The US Dollar gained significantly on Friday, following a speech from Federal Reserve (Fed) Chair Kevin Warsh at the Jackson Hole Symposium, where he warned of upside inflation risks. Read more...
British Pound holds losses amid geopolitical tensions, Fed tightening hopesThe British Pound (GBP) edges up on Monday but remains close to two-week lows against the US Dollar (USD). Risk aversion amid fresh hostilities between the US and Iran and rising bets that the US Federal Reserve (Fed) might finally hike rates in September are keeping the Greenback's dips subdued at the start of the week.
Investors' appetite for risk remains frail on Monday, following reports that the US launched the first attack on Iran in about a month, targeting missile launchers on Larak Island, where the Islamic Revolutionary Guard Corps (IRGC) were allegedly preparing rockets to place sea mines in the Strait of Hormuz. Read more...
British Pound bounces off over one-week low vs soft USD; upside potential seems limitedThe GBP/USD pair edges higher at the start of a new week, reversing a part of Friday's heavy losses to over a one-week trough. Spot prices, however, lack bullish conviction and trade below mid-1.3500s during the Asian session, warranting caution before confirming that the recent pullback from the highest level since February, touched earlier this month, has run its course.
The US Dollar (USD) pauses after Friday's strong move up to a nearly two-week high amid month-end rebalancing and acts as a tailwind for the GBP/USD pair. The British Pound (GBP), on the other hand, draws support from UK Chancellor John Healey's emphasis on maintaining fiscal discipline as the top priority for Prime Minister Andy Burnham’s government ahead of the Autumn Budget on October 28. Read more...
Pound-Dollar could rebound if US payrolls show further labour market weakness, although resilient ISM data may keep Fed rate hike expectations alive.
The Pound US Dollar (GBP/USD) exchange rate faced notable selling pressure last week amid fresh bets the Federal Reserve will deliver an interest rate hike this month.
At the time of writing, GBP/USD was trading at around $1.3661. Down around 0.7% from the start of last week’s session.
Latest — Exchange Rates:
Pound to Dollar (GBP/USD): 1.3534 (-0.46%)
Euro to Dollar (EUR/USD): 1.158209 (-0.61%)
Dollar to Yen (USD/JPY): 160.10118 (+0.50%)
DAILY RECAP:
The US Dollar (USD) wavered at the start of last week, as lingering bond and inflation jitters offset Iran sanction uncertainty.
US Treasury Secretary Scott Bessent outlined new US economic sanctions on Iran that would also target countries still trading with Tehran, raising concern of a fresh deterioration in relations between the US and China.
The US Dollar then began to strengthen in mid-week trade as the latest core PCE price index showed inflation remains above the Federal Reserve's target, underpinning bets for a rate hike later in the year.
The second half of the week was then dominated by the Fed's annual Jackson Hole symposium, with the US Dollar strengthening after hawkish signals from Fed Chair Kevin Warsh revived bets the US central bank may hike interest rates in September.
The Pound (GBP) initially held its ground last week, drawing modest support from research suggesting Britain's productivity trajectory is recovering much faster than official data indicates.
That initial resilience soon fizzled out, however. With domestic economic indicators completely dried up, Sterling was left adrift and exposed to shifting momentum across broader currency markets.
Compounding the pressure was confirmation that the UK's energy price cap will climb to a three-year high in October and concerns about how this may undermine consumer spending through the remainder of the year.
Near-Term GBP/USD Forecast: Weak Payrolls to Sink the 'Greenback'?
Turning to this week's session, there are a few high-impact US economic indicators that are set to influence the Pound to US Dollar exchange rate.
The primary focus will be on the latest non-farm payroll print, which could apply significant pressure to the 'Greenback' in the latter half of the week if there is further sign that the US labour market is cooling.
Also of note to USD investors will be the latest ISM manufacturing and services PMIs, which may be more supportive of the US Dollar if they point to continued resilience in the US private sector last month.
Back in the UK, the macroeconomic schedule remains exceptionally light. Aside from the finalised August services PMI, Sterling will have few domestic catalysts to lean on, leaving its trajectory largely at the mercy of broader market sentiment.
Exchange Rates UK Research
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United Overseas Bank’s (UOB) Quek Ser Leang and Lee Sue Ann report that GBP/USD fell sharply to 1.3527 and closed at 1.3540, contradicting expectations for range trading. Intraday, they see limited further losses within 1.3520–1.3570 due to oversold conditions. Over the coming weeks, risk stays skewed lower toward 1.3480 while the pair remains capped below 1.3600.
Pound under pressure near supports"24-HOUR VIEW: Last Thursday, GBP fell to a low of 1.3571 before recovering to close little changed at 1.3594 (-0.03%). When GBP was at 1.3595 on Friday, we highlighted that “oversold conditions, combined with slowing momentum, suggest that instead of continuing to decline today, GBP is more likely to trade in a range of 1.3570/1.3620.” We were incorrect. Instead of trading in a range, GBP fell sharply to a low of 1.3527 before settling 0.40% lower at 1.3540. Conditions remain deeply oversold, and further sustained decline appears unlikely. Today, GBP may edge lower, but any decline should remain within a range of 1.3520/1.3570."
"1-3 WEEKS VIEW: We turned slightly negative on GBP last Friday (28 Aug, spot at 1.3595), indicating that “there has been a slight increase in downward momentum, and GBP could edge lower.” However, we highlighted that “based on the prevailing momentum, any decline could be contained within a 1.3550/1.3645 range.” We did not anticipate downward momentum to increase so quickly, as GBP plunged to a low of 1.3527. The risk remains on the downside, and the level to watch is 1.3480. Overall, GBP is likely to remain under pressure as long as it holds below 1.3600 (‘strong resistance’ level). "
(This article was created with the help of an Artificial Intelligence tool and reviewed by an editor. Know more.)
The week in one sentence: speculative positioning shifted more constructively in the week to August 25. CAD short covering led the move, followed by a broad reduction in EUR shorts and renewed Gold buying. GBP and VIX positioning also improved, while JPY positioning deteriorated and WTI flows diverged from weaker prices.
The Canadian Dollar's (CAD) non-commercial net shorts shrank by over 36.5K contracts to about 121.5K contracts, marking the biggest weekly improvement since mid-December. In contrast, USD/CAD traded with respectable losses, with modest CAD rising as positioning improved. Furthermore, the net positioning increased to the 21st percentile.
EUR: Shorts retreat sharplySpeculative net shorts in the Euro (EUR) shrank by around 22.7K contracts to more than 36.3K contracts, the strongest weekly improvement since mid-April. EUR/USD advanced markedly, even surpassing the 1.1700 barrier for the first time since early May, confirming the more constructive flow, although net positioning remains near the 10th percentile of its five-year range.
JPY, AUD and commodities divergeSpeculators added nearly 10.4K contracts to their net short positioning of the Japanese Yen (JPY), even as JPY gathered extra pace and prompted USD/JPY to trade with modest losses. The Australian Dollar (AUD) net shorts widened by just 296 contracts, despite a solid performance from AUD/USD, which finally exceeded the 0.7100 barrier. WTI net longs increased by almost 1.4K contracts amid a decent drop in the price of the barrel. Coffee (KC1) speculative positioning increased marginally by 107 contracts alongside a humble price gain.
GBP and VIX: Confirmation strengthensNet positioning in the British Pound (GBP) improved by just over 10K contracts, while GBP/USD picked up strong upside traction well north of 1.3600 the figure. Speculators trimmed their VIX net shorts by roughly 11.3K contracts, mainly because the reduction of gross shorts more than offset the decline in gross longs; the aka “panic index” traded with a positive footing although meeting resistance around the 16.00 zone, indicating that price and positioning delivered a second confirmation signal.
Gold: Buying acceleratesGold net longs went up by more than 21.1K contracts to just over 243.3K contracts, the biggest weekly rise since June 2. The precious metal navigated with firm gains over the reporting week, confirming the stronger flow and lifting exposure to the 99th percentile of its five-year range.
Positioning Map: Gold reaches an extremeGold exposure sits near the 99th percentile, the clearest crowded long in the report. AUD exposure is also elevated near the 81st percentile. At the other end, EUR net positioning remains near the 10th percentile and WTI near the 13th, despite this week's modest increase in Oil longs.
The Pound-Dollar rate has fallen back to 1.3534 after Jackson Hole, but UBS still sees Sterling at 1.40 by December and 1.41 through much of 2027. The Pound to Dollar (GBP/USD) exchange rate ended Friday at 1.3534, down 0.46% after Kevin Warsh revived expectations for another Federal Reserve rate increase.
Latest — Exchange Rates:
Pound to Dollar (GBP/USD): 1.3534 (-0.46%)
Euro to Dollar (EUR/USD): 1.158209 (-0.61%)
Dollar to Yen (USD/JPY): 160.10118 (+0.50%)
That leaves Cable well below its August high at 1.3675, but UBS has made no retreat from its bullish medium-term Sterling path.
Its updated forecast table reads: “GBP/USD: 1.40 Dec 2026, 1.41 Mar 2027, 1.41 Jun 2027, 1.41 Sep 2027.”
The rationale was set out more fully by UBS strategists Constantin Bolz and Dominic Schnider earlier this month.
“UK politics have shifted from a headwind to a potential tailwind,” they said, while “[Pound] Sterling remains relatively under-owned.”
That under-ownership matters if investors return after Friday's Dollar-driven correction.
UBS has also argued that “long-dollar positioning remains vulnerable to a reversal”, creating scope for “existing long-dollar positions [to] be unwound” if Fed expectations soften again.
Friday went the other way.
Warsh pushed the implied probability of a September Fed hike from around 35% before his speech to 57.5%, while Sterling suffered its first weekly decline against the Dollar in more than a month.
We previously examined UBS's increasingly positive Sterling view before the Jackson Hole reversal.
The forecast now has a cleaner test: holding around 1.35 would leave the 1.40 year-end scenario plausible, while renewed Fed tightening pressure would make the first hurdle, around 1.38, considerably harder to clear.
Exchange Rates UK Research Our currency coverage draws on live market data, official economic releases and published bank research.
GBP/USD is holding at 1.3627 on Tuesday. In the final full week of August, the pair remains near its highest level since mid-February. Sterling is being supported by dollar weakness following the US Treasury’s unexpected decision to at least double its purchases of long-term government bonds.
Investors are also awaiting details of new sanctions against Iran. The highlight of the week will be Fed Chair Kevin Warsh’s speech at Jackson Hole on Friday, which could shape expectations for the future trajectory of US interest rates.
In the UK, money markets continue to price in one Bank of England rate hike before year-end and a further 25-basis-point move by early 2027. July inflation accelerated to 2.9% – the highest since March – while core inflation came in above expectations at 2.6%.
Further support for the pound is coming from strong domestic data: PMIs point to a pick-up in business activity, while consumer confidence climbed to a two-year high in August. At the same time, high inflation remains the key risk, potentially fuelled by a protracted conflict with Iran and elevated energy prices.
Technical analysis
On the H4 GBP/USD chart, the market has nearly reached the local upside target at 1.3672 and is forming a narrow consolidation range below this level, currently extending between 1.3619 and 1.3650. A new compact consolidation range is expected to form below 1.3672. A downside breakout would open the way for a move lower towards 1.3550. The MACD indicator supports this scenario, with its signal line above zero and beginning to turn downwards.
On the H1 chart, the market has formed a compact consolidation range around the 1.3640 level, currently extending between 1.3618 and 1.3650. A move lower towards 1.3600 is expected, and a break below this level would open the way for a further decline to 1.3550. The Stochastic oscillator confirms this scenario, with its signal line below 50 and trending downward towards 20, indicating short-term downside pressure.
ConclusionGBP/USD remains near multi-month highs, supported by dollar weakness following the US Treasury’s bond buyback announcement and strong UK economic data. Markets are now focused on upcoming catalysts, including details of new sanctions against Iran and Fed Chair Warsh’s Jackson Hole speech on Friday, which could shape expectations for US interest rates. In the UK, money markets continue to price in further BoE tightening, supported by accelerating inflation and improving business activity and consumer confidence data. However, high inflation and geopolitical risks remain key concerns. Technically, the pair may see a short-term pullback towards 1.3600, with a break below this level opening the way towards 1.3550. The near-term direction will depend on central bank signals and geopolitical developments.
GBP/USD is holding at 1.3627 on Tuesday. In the final full week of August, the pair remains near its highest level since mid-February. Sterling is being supported by dollar weakness following the US Treasury’s unexpected decision to at least double its purchases of long-term government bonds.
Investors are also awaiting details of new sanctions against Iran. The highlight of the week will be Fed Chair Kevin Warsh’s speech at Jackson Hole on Friday, which could shape expectations for the future trajectory of US interest rates.
In the UK, money markets continue to price in one Bank of England rate hike before year-end and a further 25-basis-point move by early 2027. July inflation accelerated to 2.9% – the highest since March – while core inflation came in above expectations at 2.6%.
Further support for the pound is coming from strong domestic data: PMIs point to a pick-up in business activity, while consumer confidence climbed to a two-year high in August. At the same time, high inflation remains the key risk, potentially fuelled by a protracted conflict with Iran and elevated energy prices.
Technical Analysis
On the H4 GBP/USD chart, the market has nearly reached the local upside target at 1.3672 and is forming a narrow consolidation range below this level, currently extending between 1.3619 and 1.3650. A new compact consolidation range is expected to form below 1.3672. A downside breakout would open the way for a move lower towards 1.3550. The MACD indicator supports this scenario, with its signal line above zero and beginning to turn downwards.
On the H1 chart, the market has formed a compact consolidation range around the 1.3640 level, currently extending between 1.3618 and 1.3650. A move lower towards 1.3600 is expected, and a break below this level would open the way for a further decline to 1.3550. The Stochastic oscillator confirms this scenario, with its signal line below 50 and trending downward towards 20, indicating short-term downside pressure.
Conclusion GBP/USD remains near multi-month highs, supported by dollar weakness following the US Treasury’s bond buyback announcement and strong UK economic data. Markets are now focused on upcoming catalysts, including details of new sanctions against Iran and Fed Chair Warsh’s Jackson Hole speech on Friday, which could shape expectations for US interest rates. In the UK, money markets continue to price in further BoE tightening, supported by accelerating inflation and improving business activity and consumer confidence data. However, high inflation and geopolitical risks remain key concerns. Technically, the pair may see a short-term pullback towards 1.3600, with a break below this level opening the way towards 1.3550. The near-term direction will depend on central bank signals and geopolitical developments.
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United Overseas Bank’s (UOB) Quek Ser Leang and Lee Sue Ann describe GBP/USD price action as range-bound intraday between 1.3615 and 1.3660, with momentum indicators neutral. However, their 1–3 week view remains positive after turning bullish last week, looking for a move toward 1.3700 while keeping strong support at 1.3585. A break below that level would negate the upside scenario.
Range-bound now but bullish bias"24-HOUR VIEW: After GBP closed little changed at 1.3644 (+0.09%) last Friday, we highlighted yesterday that “the price movements still appear to be part of a range-trading phase.” We expected GBP “to trade between 1.3620 and 1.3665.” Our view was not wrong, as GBP traded between 1.3621 and 1.3656 before closing at 1.3630 (-0.10%). There has been no shift in either downward or upward momentum, and GBP is likely to continue to trade in a range, probably between 1.3615 and 1.3660."
"1-3 WEEKS VIEW: We turned positive on GBP last Monday (17 Aug, spot at 1.3540). On Friday (21 Aug, spot at 1.3640), we indicated that GBP “could continue to rise to 1.3700.” There is no change in our view. On the downside, if GBP breaks below 1.3585 (no change in ‘strong support level), it will mean that 1.3700 is out of reach."
(This article was created with the help of an Artificial Intelligence tool and reviewed by an editor. Know more.)
Dollar Index Price Chart – Source: Tradingview Currently, the U.S. Dollar Index is at $99.02, up slightly from $98.55 on the 2-hour chart. While the rebound gives some short-term momentum to the DXY, it still sits below both the 100-EMA at $99.22 and the 50-EMA at $99.02, with an overall downtrend remaining intact. Until this changes, the structure will continue to be bearish.
RSI also shows the short term rebound and is currently at 55, which shows a recovery from oversold conditions and a move back above the neutral 50 level. There is resistance at $99.13 and $99.27, and even further at $99.38 and $99.71. If buying pressure pushes the price above these, $100.03 and $100.42 will be the next targets. In the event downward pressure remains at $98.99, $98.82, and $98.55, there is still downside.
In my opinion, the DXY is still under pressure unless a break of the $99.38 level is made. A break of this resistance zone could be the catalyst to push to $98.82, $98.55. In the event an upward break is made from the $99.13 – $99.38 resistance zone, it would be very bullish.
GBP/USD Technical Analysis: Pound Consolidates Above $1.3618 With $1.3656 Resistance in Focus
The British Pound (GBP) trades marginally higher against the US Dollar (USD) at around 1.3640 during the European trading session on Tuesday, even as the US Dollar Index (DXY) edges up, indicating strength in the British currency.
At press time, the US Dollar Index (DXY), which gauges the Greenback’s value against six major currencies, trades slightly higher to near 99.10.
The Pound Sterling gains despite market experts seeing the Bank of England (BoE) holding interest rates steady in the near term.
UK inflation surprise limited as BoE pricing eases
Analysts at Danske Bank note that UK inflation data for July were broadly in line with expectations, with headline CPI rising to "2.9% y/y (cons: 2.9%, prior: 2.6%), mainly driven by the 13% increase in the Ofgem energy price cap from 1 July." They highlight that "core inflation was slightly higher than expected at 2.6% y/y (cons: 2.5%, prior: 2.6%)," while "services eased in line with expectations to 3.4% y/y (cons: 3.4%, prior: 3.6%)." According to Danske, the combination of this inflation print and "yesterday's weak labour market data" has "taken the top off BoE pricing for the remainder of the year."
Meanwhile, the US Dollar trades higher against its other peers as investors fear that fresh United States (US) sanctions on Iran could lift oil prices higher and eventually US Treasury Yields.
GBP/USD Technical Analysis
GBP/USD trades at 1.3640, maintaining a bullish near-term bias, with price holding above the 20-day Exponential Moving Average (EMA) at 1.3531, which reinforces an underlying supportive structure after the recent advance.
The Relative Strength Index (14) near 69 suggests strong upside momentum, though it is flirting with overbought territory, hinting that gains could become more gradual if buyers pause ahead of fresh catalysts.
On the downside, immediate support is seen at the 20-day EMA around 1.3530, where a break would expose a deeper correction toward prior lows not visible in the current indicator set. As long as GBP/USD remains above this moving average, the broader constructive tone is likely to persist, with any shallow pullbacks viewed as corrective within the ongoing uptrend.
Strategists at Scotiabank describe the current technical backdrop for GBP/USD as "solidly bullish," noting that after a period of range trading and "two tests of 1.3150 (April and June)," the pair now appears better poised to advance. They argue that "a sustained push above 1.3650/60 implies potential for an extension towards the 1.41 zone over the balance of the year," underscoring their view that the underlying trend dynamics continue to favour further Pound appreciation.
(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 steady increase and climbed above 1.3650. A bullish trend line is forming with support near 1.3580 on the 4-hour chart. Gold surged and broke the $4,620 resistance zone. Bitcoin remained elevated, and the bulls could aim for a close above $80,000. GBP/USD Technical Analysis The British Pound found support near 1.3450 against the US Dollar. GBP/USD started another increase above the 1.3580 resistance zone.
Looking at the 4-hour chart, the pair settled above 1.3600, the 100 simple moving average (red, 4-hour), and the 200 simple moving average (green, 4-hour). The pair climbed above 1.3650 and traded as high as 1.3675 on TitanFX before it started a consolidation phase.
On the downside, an immediate support could be near 1.3600 and the 50% Fib retracement level of the upward move from the 1.3524 swing low to the 1.3675 high.
The first major support could be near 1.3580. There is also a bullish trend line forming with support at 1.3580. The next major support could be near 1.3525 and the 100 simple moving average (red, 4-hour).
The main support might be 1.3450 and the 200 simple moving average (green, 4-hour). A downside break and close below 1.3450 might send the pair toward 1.3320. Any more losses could open the door for a test of 1.3250.
On the upside, the pair could face resistance near the 1.3675 level. The next major resistance might be 1.3720. A close above 1.3720 could start another steady increase. In the stated case, the bulls could aim for a move to 1.3800. Any further gains might open the door for a test of 1.3865.
Looking at Gold, the bulls seem to be back, and they might aim for a move above the $4,720 resistance level.
Upcoming Key Economic Events:
US Housing Price Index for June 2026 (MoM) – Forecast +0.2%, versus +0.3% previous. S&P/Case-Shiller Home Price Indices for June 2026 (YoY) – Forecast +1.7%, versus +1.6% previous. Richmond Fed Manufacturing Index for August 2026 – Forecast 7.0, versus 5.0 previous.
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Key Points:EUR/USD pulled back amid profit-taking. USD/CAD gained strong upside momentum as demand for commodity-related currencies declined.USD/JPY continued its attempts to settle back above the 159.00 level.
EUR/USD
-0.15%
EUR/USD ForecastGBP/USD
-0.14%
GBP/USD ForecastUSD/CAD
+0.41%
USD/CAD ForecastUSD/JPY
+0.12%
USD/JPY Forecast
U.S. Dollar Gains Ground At The Start Of The Week
DXY 240826 4h Chart U.S. Dollar Index is moving higher as traders take some profits off the table after the strong pullback.
Today, traders had a chance to take a look at the Chicago Fed National Activity Index report. The report indicated that Chicago Fed National Activity declined from +0.06 in June to -0.08 in July, compared to analyst forecast of +0.1. The report did not have a material impact on market dynamics.
Currently, U.S. Dollar Index attempts to settle above the 99.00 level. In case this attempt is successful, U.S. Dollar Index will move towards the resistance level at 99.25 – 99.40. On the support side, a successful test of the support level at 98.60 – 98.75 will open the way to the test of the next support at 97.85 – 98.00.
EUR/USD Pulls Back As Traders Take Profits Near Multi-Month Highs EUR/USD 240826 4h Chart EUR/USD moved away from recent highs as traders waited for additional catalysts.
EUR/USD has recently made several attempts to settle above the resistance level at 1.1685 – 1.1700 but these attempts yieded no results. In case EUR/USD manages to settle above 1.1700, it will head towards the next resistance level, which is located in the 1.1775 – 1.1790 range.
On the support side, a move below the 1.1650 level will push EUR/USD towards the support at 1.1600 – 1.1615.
GBP/USD Remains Stuck Near 1.3650 GBP/USD 240826 4h Chart GBP/USD remains stuck near resistance at 1.3635 – 1.3650 amid lack of strong catalysts at the start of the week. Oil prices pulled back by -1.5%, but this move did not provide additional support to the British pound.
If GBP/USD climbs above the 1.3650 level, it will head towards the resistance level at 1.3720 – 1.3735. RSI is in the moderate territory, so there is plenty of room to gain momentum in case the right catalysts emerge.
On the support side, GBP/USD needs to settle below the 1.3620 level to have a chance to gain downside momentum in the near term. In this case, GBP/USD will move towards the next support at 1.3550 – 1.3565.
USD/CAD 240826 4h Chart USD/CAD gained ground as demand for commodity-related currencies declined despite rising gold markets. The pullback in the oil markets has not provided support as traders remained worried about potential escalation in the Middle East, which could hurt global growth and reduce demand for commodities.
Currently, USD/CAD is trying to settle above the resistance level at 1.3825 – 1.3840. In case this attempt is successful, USD/CAD will get to the test of the 50 MA at 1.3855. A move above the 50 MA will push USD/CAD towards the next resistance level at 1.3900 – 1.3915.
USD/JPY Tests The 50 MA At 159.11 USD/JPY 240826 4h Chart USD/JPY moved higher despite the pullback in Treasury yields. The yield of 2-year Treasuries settled near the 4.24% level, while the yield of 10-year Treasuries declined towards 4.69%.
If USD/JPY manages to settle above the 50 MA at 159.11, it will move towards the nearest resistance level, which is located in the 159.50 – 160.00 range. A successful test of this level will open the way to the test of the next resistance at 161.50 – 162.00.
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Vladimir is an independent trader, with over 18 years of experience in the financial markets. His expertise spans a wide range of instruments like stocks, futures, forex, indices, and commodities, forecasting both long-term and short-term market movements.
Scotiabank strategists Shaun Osborne and Eric Theoret report that the British Pound (GBP) is flat versus the Dollar but outperforming G10 peers despite broad USD strength. With data light, attention turns to PM Burnham’s visit to Kiev and the October 28 budget. Improved sentiment is visible in options markets, and they see scope for GBP/USD to advance toward the 2026 high in the upper‑1.38s.
Pound outperforms on crosses"The pound is entering Monday’s NA session nearly unchanged vs. the USD while outperforming all of the G10 currencies in an environment of broadbased USD strength. The release calendar remains empty and near-term focus appears to be centered on PM Burnham’s visit to Kiev."
"Fiscal developments have been limited but media are already tightening their focus on the autumn budget scheduled for October 28. Measures of sentiment have revealed a material improvement in the market’s mood toward the GBP, with steady gains observed in risk reversals as the options market has faded the premium for protection against downside risk. We see scope for further gains toward the 2026 high in the upper1.38s."
"Bullish – as with EUR, the GBP’s RSI is hovering around the overbought threshold at 70 and just off last week’s peak."
"Recent price action has revealed resistance above 1.3650 and we see limited additional resistance between current spot and the 2026 peak in the upper-1.38s."
"We see near-term support at 1.3600 and 1.3550."
(This article was created with the help of an Artificial Intelligence tool and reviewed by an editor. Know more.)
Cable trades near 6 ½ month peak (1.3675, hit on Friday) and moving in more quiet mode on Monday, as traders reduce speed ahead of this week’s key events – release of US PCE Index and the speech of Fed’s Warsh in Jackson Hole symposium, which is expected to provide the latest inflation update as well as potential signal about the US central bank’s steps in coming months.
Negatively diverging 14-d momentum, overbought RSI and long upper shadows on Thu/Fri daily candles, warn that bulls may start losing traction.
Larger bullish structure remains firm and suggests that corrective dips should be shallow (ideally to be contained by rising 10DMA at 1.3559, with deeper pullback to find footstep above 1.3520 – Fibo 38.2% of 1.3273/1.3675 upleg) and keep bulls in play for potential acceleration towards 2026 peak at 1.3869.
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Dollar Index Price Chart – Source: Tradingview For the U.S. Dollar Index, the 4-hour chart shows a price currently at $98.89 after breaking the $99.38 support. The price is below the 50, and 100, period Exponential Moving Averages (EMAs) confirming a bearish sentiment. The price has been attempting to stabilize in the range of $98.55 to $98.82, and has broken some support, but no major resistances have been established.
The USD Index Relative Strength Indicator (RSI) is at 44. It has improved from the oversold area but remains under neutral. The first resistance is at $98.99, and the subsequent resistances are at $99.13, $99.27, and $99.38. The targets after that are $99.71, and $100.03. The first support is at $98.55, and after that are $98.24, and $97.89.
While the price of the DXY remains below $99.38, the overall sentiment remains bearish. Recovery of the price above $99.38 would change some of the sentiment, but consistent rejection of the price below the EMA cluster would keep the sentiment bearish and may test $98.55 again.
GBP/USD Technical Analysis: Pound Tests Triple-Top Resistance Near $1.3656 as RSI Turns Overbought
United Overseas Bank’s (UOB) Quek Ser Leang and Lee Sue Ann note GBP/USD remains in a short-term consolidation, with price action confined between 1.3620 and 1.3665 after an overbought push to 1.3675. Their 1–3 week view stays positive, looking for a move toward 1.3700 unless the pair falls through strong support at 1.3585, while longer-term signals still favor broader range trading.
Short term consolidation, medium term upside"24-HOUR VIEW: GBP rose to a high of 1.3661 last Thursday and then eased. When it was at 1.3640 on Friday, we highlighted that “further GBP strength is not ruled out, but deeply overbought conditions suggest any advance could be contained within a 1.3605/1.3670 range.” We added, “even if GBP breaks above 1.3670, it is unlikely to reach the major resistance at 1.3700.” GBP subsequently rose to 1.3675 and then pulled back to close little changed at 1.3644 (+0.09%). The price movements still appear to be part of a range-trading phase. Today, we expect GBP to trade between 1.3620 and 1.3665."
"1-3 WEEKS VIEW: We turned positive on GBP last Monday (17 Aug, spot at 1.3540). On Friday (21 Aug, spot at 1.3640), we indicated that GBP “could continue to rise to 1.3700.” There is no change in our view. On the downside, if GBP breaks below 1.3585 (‘strong support’ level was at 1.3575 last Friday), it would mean that 1.3700 is out of reach."
(This article was created with the help of an Artificial Intelligence tool and reviewed by an editor. Know more.)
Pound-Dollar could extend its six-month high if Jackson Hole fails to revive Fed tightening bets and US payroll revisions deepen labour market concerns. The Pound US Dollar (GBP/USD) exchange rate stormed higher last week as markets were spooked by US debt concerns.
At the time of writing, GBP/USD was trading at around $1.3661. Up around 0.9% from the start of last week’s session.
Latest — Exchange Rates:
Pound to Dollar (GBP/USD): 1.36445 (+0.01%)
Euro to Dollar (EUR/USD): 1.16767 (-0.09%)
Dollar to Yen (USD/JPY): 158.98453 (+0.05%)
DAILY RECAP:
The US Dollar (USD) came under heavy selling pressure this week, with the ‘Greenback’ nosediving as growing concerns over the US fiscal outlook undermined confidence in the currency.
This was sparked by warning signs from the US Treasury market, where elevated long-term borrowing costs prompted the Treasury to announce a significant expansion of its bond buyback programme.
Concerns over the US fiscal outlook were compounded by reports that America’s national debt had reached a new record high of $40tn.
While able to soar to new multi-month highs against the US Dollar, the Pound (GBP) performance against its other peers proved more turbulent amid a deluge of UK economic releases.
The data made for mixed reading, with a weak jobs report and rise in inflation leaving Sterling to struggle in the first half of the week as it clouded the outlook for the Bank of England (BoE).
Attempts to rebound in the latter half of the week also quickly ran out of steam as a sharp slump in retail sales dragged on the Pound, leaving it unable to capitalise on an otherwise encouraging set of flash PMI figures.
Near-Term GBP/USD Forecast: Jackson Hole and Payrolls Revision in the Spotlight Turning to the week ahead, there are a couple of key events which could infuse volatility into the Pound to US Dollar exchange rate next week.
First up is the Federal Reserve's annual Jackson Hole symposium.
Jackson Hole has traditionally been used by Fed Chairs to outline how the bank may shape monetary policy in the coming months, however, under Kevin Warsh, the Fed has moved to limit guidance, which may come as a disappointment to USD investors.
The other focus will be on the US Bureau of Labor Statistics annual revision to non-farm payrolls, which could place significant pressure on the 'Greenback' if the US labour market added fewer jobs than expected over the past twelve months.
Back in the UK, a lull in domestic releases means Sterling will likely take its cues from broader risk appetite and global market sentiment.
Exchange Rates UK Research Our currency coverage draws on live market data, official economic releases and published bank research.
