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The British Pound (GBP) trades marginally higher to near 1.3387 against the US Dollar (USD) during the European trading session on Thursday. The GBP/USD pair edges higher as the US Dollar drops despite surging oil prices in the wake of escalating Middle East energy supply risks.

At press time, the US Dollar Index (DXY), which gauges the Greenback’s value against six major currencies, trades 0.15% lower to near 101.00.

On the domestic front, investors await the Federal Reserve’s (Fed) monetary policy announcement next week, in which it is expected to leave interest rates unchanged.

Meanwhile, the British Pound demonstrates a broader mixed performance while fears of Bank of England (BoE) interest rate hikes have eased. Traders doubt the BoE will tighten monetary conditions in the near term as the United Kingdom (UK) headline Consumer Price Index (CPI) growth has cooled down to 2.6% Year-on-Year (YoY) in June from the previous reading of 2.8%.

BoE seen on extended hold before gradual easing to neutral in 2027Economists at Societe Generale reiterate that their “baseline forecast remains that the BoE will keep Bank Rate on hold at 3.75% throughout 2026,” reflecting a view that policymakers will need prolonged time to consolidate the disinflation trend. They add that “by early 2027, we expect the MPC to gain confidence that inflation will return sustainably to the 2% target over the medium term, allowing for cumulative rate cuts of 75bp in 2027,” which would “bring Bank Rate to our estimate of its neutral level of 3%.”

Going forward, investors will focus on the UK Retail Sales for June and the preliminary S&P Global PMI data for July, which will be released on Friday.

GBP/USD technical analysis

GBP/USD trades slightly higher at around 1.3387 at press time. The pair corrects to near the 20-day exponential moving average (EMA), which is at 1.3385, after correcting from the downward-sloping border of the Descending Triangle pattern at 1.3540, suggesting that the near-term outlook has become uncertain.

The Relative Strength Index (14) at 50.73 sits near neutral, hinting that recent buying pressure is stabilizing rather than driving a decisive breakout, leaving the near-term bias slightly constructive but still capped by overhead trend resistance.

On the topside, initial resistance is located at the downward-sloping trend-line region near 1.3501, followed by the July 15 high at 1.3558. On the downside, the July 8 low at 1.3322 is the immediate support zone, with a more notable cushion at the June 24 low at 1.3140.

(The technical analysis of this story was written with the help of an AI tool. Know more.)

Economic Indicator Consumer Price Index (YoY) The United Kingdom (UK) Consumer Price Index (CPI), released by the Office for National Statistics on a monthly basis, is a measure of consumer price inflation – the rate at which the prices of goods and services bought by households rise or fall – produced to international standards. It is the inflation measure used in the government’s target. The YoY reading compares prices in the reference month to a year earlier. Generally, a high reading is seen as bullish for the Pound Sterling (GBP), while a low reading is seen as bearish.

Read more.

The Bank of England is tasked with keeping inflation, as measured by the headline Consumer Price Index (CPI) at around 2%, giving the monthly release its importance. An increase in inflation implies a quicker and sooner increase of interest rates or the reduction of bond-buying by the BOE, which means squeezing the supply of pounds. Conversely, a drop in the pace of price rises indicates looser monetary policy. A higher-than-expected result tends to be GBP bullish.

British Pound nudges higher above 1.3350 despite Middle East turmoilThe GBP/USD pair rebounds to near 1.3385 during the Asian trading hours on Thursday. However, the potential upside for the major pair might be limited amid cooler-than-expected UK inflation data and escalating tensions in the Middle East. Traders will take more cues from the UK Retail Sales report, which is due later on Friday.

The UK headline Consumer Price Index (CPI) inflation slowed to 2.6% YoY in June, the lowest since March 2025, down from 2.8% in May, according to the Office for National Statistics (ONS) on Wednesday. This figure came in softer than the market expectations of 2.7% growth. Read more...

A cooler inflation print buys British Pound Sterling nothing but a slower declineThe Pound's week-long slide slowed to a crawl on Wednesday, and it picked an odd session to do so, because the June inflation report handed sellers their cleanest argument yet. GBP/USD tagged the 1.3350 area in early New York trade, its weakest level in over a week, and now sits between that floor and the converged moving-average band just below 1.3400, on track for a fifth straight daily decline measured in single-digit pips.

The Office for National Statistics put headline Consumer Price Index (CPI) inflation at 2.6% YoY for June, under the 2.7% consensus, down from 2.8% in May and the lowest annual rate since March 2025. Services inflation eased to 3.6% from 3.7%, the monthly gain ran at just 0.1%, and transport and food did most of the downward work, precisely the categories a war-supply shock was supposed to keep hot. Read more...

British Pound steadies as cooler UK CPI meets Oil shockThe Pound Sterling holds firm during the North American session as UK inflation data dipped, easing pressure on the Bank of England to tackle higher prices, while attacks between the US and Iran don’t seem to be ending in the Middle East. The GBP/USD trades at 1.3377.

During the European session, UK inflation data for June dipped from 2.8% to 2.6% YoY. The core Consumer Price Index (CPI) remained steady at 2.6% YoY for the same period. Even though this relieves the BoE, traders continued to price in an 82% chance for a rate hike by the November 5 meeting, according to Prime Terminal data. Read more...

The Pound Sterling holds firm during the North American session as UK inflation data dipped, easing pressure on the Bank of England to tackle higher prices, while attacks between the US and Iran don’t seem to be ending in the Middle East. The GBP/USD trades at 1.3377. Read More...

UK inflation cools and fiscal concerns grow: Why the British Pound is surrendering recent gainsThe British Pound (GBP) is facing renewed downward pressure across major currency pairs, forfeiting its recent gains as market participants digest a combination of cooling domestic inflation and growing fiscal uncertainty surrounding Prime Minister Andy Burnham’s economic agenda. Read More...

British Pound remains depressed against US Dollar following soft UK inflation dataThe British Pound (GBP) consolidates losses against the US Dollar (USD) on Wednesday, as a string of UK inflation figures provided some leeway for the Bank of England to maintain its “wait-and-see” stance through the coming months. The GBP/USD pair remains pinned near weekly lows, below 1.3400 following a nearly 1.2% decline in the last four days. Read More...

Interest rates in America continue to put bearish pressure on some currencies.

EUR/USD Technical Analysis

EUR/USD daily chart, slipping near 1.1410 toward the 1.1400 level. Source: TradingView The euro has rallied slightly in the early part of the trading session on Wednesday, but as you can see, the market is struggling to continue to go to the upside. Ultimately, this is a market that is trying to hang around the 1.14 level and make a bigger decision as to where we are going next.

With that being the case, I think this is a market that anytime it rallies, there will be a certain amount of people willing to sell it. Rising interest rates in America continue to put bearish pressure on this pair. The 1.14 level is a support area. Some traders could even see this as a bearish flag with the measure of the pole somewhere just around the 1.12 level.

GBP/USD Technical Analysis

GBP/USD daily chart, hovering near 1.3370 where its EMAs converge. Source: TradingView The British pound initially rallied, but it looks like the sellers are starting to come back in as well with those higher rates. That does make a certain amount of sense as the interest rate differential shrinks between London and DC. With so many concerns around the world, the US dollar is considered to be a safety currency most of the time. Maybe that is what is going on, but we are right in the middle of a larger consolidation area, and that is something worth paying attention to as well.

USD/CHF Technical Analysis USD/CHF daily chart, pushing near 0.8120 back toward its July highs. Source: TradingView The US dollar has done very little against the Swiss franc during the trading session on Wednesday. The 0.8150 level continues to be an area that is attracting a certain amount of attention as potential resistance. A break above there would be a bullish sign; it would be a break of a swing high in an area that goes back quite some time. Short-term pullbacks continue to attract buyers. The interest rate differential most decidedly favors America here, so carry traders like buying this as well.

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GBP/USD remains steady after four days of losses, trading around 1.3370 during the European hours on Wednesday. The pair is holding a mildly bearish near‑term bias as spot remains capped beneath the 50‑day and nine-day Exponential Moving Averages (EMAs).

The 14-day Relative Strength Index (RSI) at 49.56 sits near the neutral line, hinting at consolidative momentum rather than a decisive directional push.

The technical analysis of the daily chart suggests a bearish breakdown and signals a potential trend reversal or consolidation phase as the GBP/USD pair has broken below the lower boundary of an ascending channel. Further support lies at the eight-month low of 1.3140, recorded on June 24.

On the upside, the immediate barrier lies at the 50-day EMA of 1.3383, followed by the nine-day EMA at 1.3406. A rebound above the moving averages would revive the bullish bias and support the GBP/USD pair to explore the region around the upper boundary of the ascending channel around 1.3640, followed by the five-month high of 1.3658, reached on May 1. A break above this level would expose 1.3869, the highest level since September 2021, reached on January 27.

GBP/USD: Daily Chart(The technical analysis of this story was written with the help of an AI tool. Know more.)

Pound Sterling Price Today The table below shows the percentage change of British Pound (GBP) against listed major currencies today. British Pound was the strongest against the New Zealand Dollar.

USDEURGBPJPYCADAUDNZDCHFUSD-0.11%-0.04%-0.10%-0.11%0.02%0.10%-0.12%EUR0.11%0.08%0.04%-0.00%0.13%0.22%-0.01%GBP0.04%-0.08%-0.04%-0.08%0.04%0.14%-0.09%JPY0.10%-0.04%0.04%-0.01%0.13%0.20%-0.02%CAD0.11%0.00%0.08%0.01%0.14%0.27%-0.01%AUD-0.02%-0.13%-0.04%-0.13%-0.14%0.10%-0.14%NZD-0.10%-0.22%-0.14%-0.20%-0.27%-0.10%-0.25%CHF0.12%0.00%0.09%0.02%0.00%0.14%0.25% The heat map shows percentage changes of major currencies against each other. The base currency is picked from the left column, while the quote currency is picked from the top row. For example, if you pick the British Pound from the left column and move along the horizontal line to the US Dollar, the percentage change displayed in the box will represent GBP (base)/USD (quote).

The British Pound (GBP) consolidates losses against the US Dollar (USD) on Wednesday, as a string of UK inflation figures provided some leeway for the Bank of England to maintain its “wait-and-see” stance through the coming months. The GBP/USD pair remains pinned near weekly lows, below 1.3400 following a nearly 1.2% decline in the last four days.

Data released by the UK National Statistics Office on Wednesday revealed that the Consumer Price Index (CPI) moderated to a 2.6% year-over-year (Y-o-Y)  growth in June, from 2.8% in May, below the 2.7% forecasted by market analysts. The Core CPI, however, remained steady at 2.6% against expectations of a 2.5% reading.

Beyond that, the Input Producer Price Index (PPI) contracted 2% on the month, its sharpest decline in more than six years, while the Output PPI remained flat, undershooting expectations of a 0.4% advance. Year on year, input PPI eased to 7.3% from 9.3% while the Output PPI slowed down to 3.5% in June from 3.7% in May.

In the US, the calendar has been thin this week, but the US Dollar maintains a bid tone, buoyed by market concerns about the war in the Middle East and higher US Treasury yields. The US military pounded targets in Iran for the 11th consecutive day on Wednesday, and US President Donald Trump threatened to attack nuclear facilities, which, according to Tehran, would expand the war in the region.

UK Pound slides amid PM Burnham’s early fiscal signalsRabobank’s FX team notes that “UK markets have now had a few hours to react to PM Burnham’s new cabinet, many of whom have been involved in UK politics for years,” and the initial response has been cautious. They highlight that “10-year gilt yields are currently above the 5% level, which is a sign of some anxiety,” while “the Pound is the worst performing G10 currency on a 1-day view,” underscoring investor unease around the new administration’s fiscal direction.

In the near term, Rabobank points out that “Burnham has promised measures to ease cost-of-living pressures,” with the policy push already underway. “He kicked this off this morning with the news that VAT on household electricity bills will be cut from October,” the bank observes, adding that “the market is now bracing itself for a list of further announcements” as investors assess how these initiatives will be funded and what they might mean for UK assets.

Economic Indicator Consumer Price Index (YoY) The United Kingdom (UK) Consumer Price Index (CPI), released by the Office for National Statistics on a monthly basis, is a measure of consumer price inflation – the rate at which the prices of goods and services bought by households rise or fall – produced to international standards. It is the inflation measure used in the government’s target. The YoY reading compares prices in the reference month to a year earlier. Generally, a high reading is seen as bullish for the Pound Sterling (GBP), while a low reading is seen as bearish.

Read more.

The Bank of England is tasked with keeping inflation, as measured by the headline Consumer Price Index (CPI) at around 2%, giving the monthly release its importance. An increase in inflation implies a quicker and sooner increase of interest rates or the reduction of bond-buying by the BOE, which means squeezing the supply of pounds. Conversely, a drop in the pace of price rises indicates looser monetary policy. A higher-than-expected result tends to be GBP bullish.

Economic Indicator Consumer Price Index (MoM) The United Kingdom (UK) Consumer Price Index (CPI), released by the Office for National Statistics on a monthly basis, is a measure of consumer price inflation – the rate at which the prices of goods and services bought by households rise or fall – produced to international standards. It is also the inflation measure used in the government’s target. The MoM figure compares the prices of goods in the reference month to the previous month. Generally, a high reading is seen as bullish for the Pound Sterling (GBP), while a low reading is seen as bearish.

Read more.

British Pound bounces off one-week low vs USD amid Iran diplomacy hopes, ahead of UK CPIThe GBP/USD pair edges higher during the Asian session on Wednesday, snapping a four-day losing streak to the 1.3360 area, or a one-week low, touched the previous day. Spot prices, however, lack follow-through buying and trade below the 1.3400 mark, warranting caution before confirming that the recent pullback from an over two-month high has run its course.

The US Dollar (USD) pauses following a four-day rally to a one-week high amid hopes that US-Iran diplomacy could ease energy prices and temper hawkish US Federal Reserve (Fed) expectations. This, in turn, is seen as a key factor lending support to the GBP/USD pair. However, the geopolitical risk remains in play amid a further escalation of tensions between the US and Iran. Read more...

British Pound Sterling gets a decent jobs report and sells off anywayThe British Pound received a labour market report on Tuesday that beat consensus on nearly every line, and sold off anyway. Sterling slid from a London morning high just above 1.3450 to a New York low just above 1.3350, knifing through the 50-day and 200-day Exponential Moving Averages that sit converged just below 1.3400. GBP/USD trades near 1.3380 late in the session, the weakest of the majors on the day, on track for a fourth consecutive daily decline, and holding its first session beneath both long-term averages since the mid-July rebound began. More than a third of that rebound off the summer base near the 1.3150 area is already gone.

On the surface, Tuesday's labour market data argued for a Pound bid rather than a fourth day of selling. Employment rose 147K in the three months to May against 100K prior, the claimant count climbed just 6.7K in June against a 28.3K consensus, and the unemployment rate slipped to 4.9% when the market expected 5%. The blemish sat in the pay figures, where average earnings including bonuses slowed to 4.3% against a 4.5% consensus, extending the cooling trend the Bank of England has spent months waiting for. Read more...

GBP/USD Price Forecast: Tests nine-day EMA support near 1.3400GBP/USD remains weaker for the fourth consecutive day, trading around 1.3430 during the European hours on Tuesday. The technical analysis of the daily chart indicates a prevailing bullish bias as the pair remains within the ascending channel.

The GBP/USD pair is holding a constructive bullish bias as spot remains above both the nine-day and 50-day Exponential Moving Averages (EMAs). The alignment of shorter and longer EMAs below price suggests an underpinning uptrend, while the 14-day Relative Strength Index (RSI) at roughly 55 points to steady, rather than overstretched, positive momentum. Read more...

The Pound Sterling loses some ground against the US Dollar, down by 0.48%, as risk appetite in the foreign exchange markets deteriorates, with the Greenback reclaiming key technical levels in the US Dollar Index (DXY) amid the escalation of the US-Iran conflict. The GBP/USD trades at 1.3371, after reaching a daily high of 1.3455. Read More...

British Pound extends losses nearing 1.3400 as markets await Burnham’s policiesThe British Pound (GBP) is one of the weakest performers among major currencies, extending its reversal against the US Dollar for the fourth consecutive week. The GBP/USD pair is drifting closer to the 1.3400 level heading into the US trading session on Tuesday, as investors ponder UK Prime Minister Burnham's promises and the profiles of his cabinet's members. Read More...

British Pound attracts bids after UK employment data releaseThe British Pound (GBP) snaps a three-day losing streak against the Japanese Yen (JPY), rebounding to near 218.55 during the European trading session on Tuesday. The cross attracts bids after the release of the United Kingdom (UK) labor market data for the three months ending May. Read More...

GBP/USD Key Points The UK jobs report was mixed, with unemployment falling but wages coming in lower than expected. Traders are skeptical about the new UK government, but aren’t panicking yet. The Pound is the weakest major currency on the day, with GBP/USD falling -50 pips on the day to break below a 1-month bullish trendline.

Outside of earnings reports from Alphabet and Tesla after the bell tomorrow, most of the major market-moving economic data will come from the European continent this week. Today’s focus is on the situation in the UK.

During this morning’s European session, the UK jobs report pointed to a labor market that is stabilizing, albeit at a relatively weak level. Unemployment slipped to 4.9% in the three months through May, while the employment rate edged up to 75.1%. In terms of raw numbers, new unemployment claimants fell to 6.7K, well below expectations of 29K, while average earnings rose 4.3% 3mo/y, below the 4.5% that economists had anticipated. Overall, easing wage pressure and weak hiring should reassure the Bank of England that domestic inflation is cooling, although conflicting employment surveys and recent data-quality problems argue against placing too much weight on this report in isolation.

New Chancellor and Energy VAT In one of new Prime Minister Andy Burnham’s first moves, John Healey was appointed Chancellor of the Exchequer yesterday. Healey has previous junior Treasury experience, but his recent political profile was built at the Ministry of Defence, where he criticized the Treasury for constraining government ambitions and pushed for defense spending to reach 3% of GDP by 2030.

His first comments in the new role emphasized that fiscal control and market credibility remain central, a key note to hit in an economy plagued by high debt, elevated borrowing costs and little room for significant unfunded spending.

The government’s first cost-of-living measure will temporarily cut VAT on household electricity from 5% to zero for six months beginning October 1, reducing the typical annualized bill by around £45 and costing approximately £850 million in 2026–27. Ministers say the measure will be funded by cancelling the previous government’s planned £1.8 billion digital ID program, although the IFS notes that the program’s funding had never been fully identified, weakening the claim that its cancellation creates a straightforward cash saving. For the broader economy, the policy should mechanically lower headline inflation and provide some household relief, but it is modest in scale.

Moving forward, traders will key in on any policy pronouncements from the new government, with the highly-anticipated November budget already looming in the back of some traders’ minds.

British Pound Technical Analysis: GBP/USD 4-Hour Chart

Source: Tradingview, StoneX

Markets are already expressing a dollop of skepticism toward the new government, with the yield on the benchmark 10yr Gilt rising 6bps since the announcement to cross back above the psychologically significant 5% level. Meanwhile, pound sterling is the weakest major currency on the day, falling more than 50 pips against the greenback as of writing and breaking below a 1-month bullish trendline. Moving forward, the pair is likely to remain under pressure, with near-term support at last week’s low near 1.3350 and then the 1.3300 level. Only a recovery back above 1.3450 would erase the near-term bearish bias.

-- Written by Matt Weller, Global Head of Research

Check out Matt’s Daily Market Update videos on YouTube and be sure to follow Matt on Twitter: @MWellerFX

GBP/USD remains weaker for the fourth consecutive day, trading around 1.3430 during the European hours on Tuesday. The technical analysis of the daily chart indicates a prevailing bullish bias as the pair remains within the ascending channel.

The GBP/USD pair is holding a constructive bullish bias as spot remains above both the nine-day and 50-day Exponential Moving Averages (EMAs). The alignment of shorter and longer EMAs below price suggests an underpinning uptrend, while the 14-day Relative Strength Index (RSI) at roughly 55 points to steady, rather than overstretched, positive momentum. Read more...

GBP/USD falls after cabinet changesGBP/USD fell to 1.3437 on Tuesday as investors assessed the appointment of Andy Burnham as the new Prime Minister of the UK and the outlook for monetary policy.

Burnham succeeded Keir Starmer without a contest, becoming the country's seventh prime minister in the past decade and the second since the Labour Party returned to power in 2024. Read more...

British Pound attracts bids after UK employment data releaseThe British Pound (GBP) snaps a three-day losing streak against the Japanese Yen (JPY), rebounding to near 218.55 during the European trading session on Tuesday. The cross attracts bids after the release of the United Kingdom (UK) labor market data for the three months ending May.

The Office for National Statistics (ONS) has reported that the economy created 147K fresh jobs, higher than the previous reading of 100K. The ILO Unemployment Rate remained steady at 4.9%, while it was expected to arrive higher at 5%. Read more...

United Overseas Bank’s (UOB) Quek Ser Leang judges GBP/USD price action as range-bound after an unexpected intraday spike and sharp drop. The pair is now expected to hold between 1.3400 and 1.3460 in the short term, with a broader 1.3385–1.3495 range for the coming weeks. Momentum indicators are flat, suggesting neutral direction with wider supports at 1.3210 and 1.3160.

Sterling-Dollar momentum fades into consolidation"24-HOUR VIEW: Yesterday, we highlighted that GBP “is likely to trade in a range between 1.3420 and 1.3475.” The subsequent price movements did not turn out as expected. GBP rose to 1.3481 before declining sharply to a low of 1.3414. The decline could extend further, but given the lack of any significant increase in downward momentum, GBP is likely to remain within a 1.3400/1.3460 range."

"1-3 WEEKS VIEW: Our update from yesterday (20 Jul, spot at 1.3445) remains valid. As highlighted, the recent “build-up in upward momentum has faded,” and GBP “has likely entered a range-trading phase between 1.3385 and 1.3495.”."

(This article was created with the help of an Artificial Intelligence tool and reviewed by an editor. Know more.)

GBP/USD fell to 1.3437 on Tuesday as investors assessed the appointment of Andy Burnham as the new Prime Minister of the UK and the outlook for monetary policy.

Burnham succeeded Keir Starmer without a contest, becoming the country’s seventh prime minister in the past decade and the second since the Labour Party returned to power in 2024.
The new head of government reaffirmed his commitment to current fiscal rules but indicated he would consider raising the tax-free personal allowance, which has remained frozen in recent years.

Attention is now turning to the appointment of the Chancellor of the Exchequer. According to media reports, Shabana Mahmood is considered the leading candidate.

Additional pressure on the pound is coming from elevated oil prices, which are increasing inflationary risks and reinforcing expectations that the Bank of England will keep interest rates higher for longer.

Technical Analysis

On the H4 GBP/USD chart, the market is moving lower towards 1.3380. A wide consolidation range is forming around the 1.3468 level. An upside breakout from this range would open the way for a move towards 1.3520, while a downside breakout would suggest a decline towards 1.3380, with scope for the trend to extend to 1.3222. The MACD indicator supports this scenario, with its signal line above zero and pointing firmly downwards, reflecting continued bearish momentum.

On the H1 chart, the market has formed a compact consolidation range around the 1.3468 level, currently extending down to 1.3414. A move higher towards 1.3455 is expected, followed by a decline to 1.3380. The Stochastic oscillator confirms this scenario, with its signal line below 80 and pointing downwards towards 20, indicating increasing short-term downside pressure.

Conclusion Sterling has retreated as markets digest the transition of power to Prime Minister Andy Burnham, who has reaffirmed fiscal discipline while signalling a possible increase in the tax-free allowance. Investors are now focused on the appointment of the new Chancellor, with Shabana Mahmood reportedly the frontrunner. Meanwhile, elevated oil prices continue to stoke inflation risks, reinforcing expectations that the Bank of England will maintain higher interest rates for longer. Technically, the pound appears poised for further downside towards 1.3380, with the broader outlook dependent on upcoming fiscal announcements and the trajectory of global energy prices.

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British Pound struggles as traders evaluate BoE policy, UK political developmentsGBP/USD steadies after three days of losses, trading around 1.3430 during the Asian hours on Tuesday. After recently surging toward two-month highs near 1.3550, the pair has moderated as foreign exchange traders evaluate shifting monetary policies between the Bank of England (BoE) and the US Federal Reserve (Fed) alongside political developments in the United Kingdom (UK).

From a macroeconomic perspective, central bank policy divergence remains the central pillar steering the exchange rate. While market participants anticipate eventual rate adjustments on both sides of the Atlantic, subtle differences in inflation stickiness and labor market strength determine relative yield appeal. Read more...

British Pound Sterling greets a new Prime Minister with a three-day slideGBP/USD trades down around 0.17% on Monday and is on track for a third consecutive daily decline, fading from short of 1.3500 in the London morning to a New York probe just above the 1.3400 handle before steadying between the two. The slide unwinds the last of the mid-July rebound's momentum and confirms that Cable's recovery off the summer base has run out of road well before the levels that matter.

The rejection zone tells the larger story, because 1.3550 has graduated from a line in the sand into a hard wall: it capped the pair in mid-June, repelled last week's push, and now marks the floor of a full-depth resistance zone running up to the next ceiling at 1.3650. With the daily Stochastic Relative Strength Index pushing 90, the market picked the top of an overbought bounce to hand Downing Street to a new tenant. Read more...

British Pound slips as Burnham fiscal pledge fails to lift SterlingThe Pound Sterling reverses course and turns negative on the day as Andy Burnham is named the new Prime Minister and reassures that he will stick to the fiscal rules set by the former Chancellor, Rachel Reeves, who just resigned. The GBP/USD trades at 1.3425, after hitting a daily high of 1.3481.

Sentiment turned upbeat, even though hostilities in the Middle East continued. Attacks between the US and Iran keep tensions high, keeping investors worried about a disruption in Oil supply, which the US Crude Oil benchmark, WTI so far up 21% in the month. This reignited speculation that the Federal Reserve (Fed) could increase rates by 25 basis points toward the end of the year. Read more...

Key Points:EUR/USD pulled back as traders focused on rising Treasury yields. GBP/USD moved lower as traders waited for first moves of new UK Prime Minister. USD/CAD gained ground as Canada's Inflation Rate missed analyst estimates.

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U.S. Dollar Moves Higher At The Start Of The Week

DXY 200726 4h Chart U.S. Dollar Index gains ground as traders focus on rising Treasury yields. The yield of 2-year Treasuries climbed above the 4.22% level, while the yield of 10-year Treasuries settled near 4.60%. Treasury yields are moving higher as bond traders worry that rising oil prices will create inflationary pressure.

U.S. Dollar Index managed to settle above the 50 MA at 100.86 and is trying to settle above the 100.00 level. In case this attempt is successful, U.S. Dollar Index will move towards the resistance at 101.15 – 100.30. A successful test of this level will open the way to the test of the next resistance at 101.80 – 101.95. RSI is in the moderate territory, so there is plenty of room to gain momentum in case the right catalysts emerge.

EUR/USD Pulls Back As Germany’s PPI Meets Estimates

EUR/USD 200726 4h Chart EUR/USD pulled back as traders focused on Producer Prices report from Germany. The report showed that PPI increased by +1.8% year-over-year in June, in line with analyst consensus.

Currently, EUR/USD is trying to settle below the support at 1.1420 – 1.1435. In case this attempt is successful, EUR/USD wil move towards the next support level, which is located in the 1.1350 – 1.1365 range.

GBP/USD Retreats As Traders Wait For First Moves From New PM GBP/USD 200726 4h Chart GBP/USD is losing ground as traders react to political developments in the UK. New Prime Minister Andy Burnham promised to bring a new economic model for the UK, but markets remain skeptical. His predecessors also pledged to boost UK finances, but their attempts yielded no results.

In case GBP/USD manages to settle below the 50 MA at 1.3424, it will head towards the nearest support at 1.3335 – 1.3350. On the upside, GBP/USD needs to settle back above the resistance at 1.3450 – 1.3465 to have a chance to gain upside momentum in the near term.

USD/CAD Rebounds As Canada’s Inflation Rate Drops To 2.8% USD/CAD 200726 4h Chart USD/CAD moved away from recent lows as traders focused on inflation data from Canada. Inflation Rate declined from 3.2% in May to 2.8% in June, compared to analyst forecast of 2.9%. Core Inflation Rate decreased from 2.2% to 2.1%, while analysts expected that it would remain unchanged at 2.2%. The lower-than-expected inflation report put pressure on the Canadian dollar. Other commodity-related currencies are gaining ground in today’s trading session.

If USD/CAD settles above the 1.4050 level, it will head towards the 50 MA at 1.4095. A move above the 50 MA will open the way to the test of the resistance level at 1.4125 – 1.4140.

USD/JPY Moves Higher As Treasury Yields Rise

USD/JPY 200726 4h Chart USD/JPY gains ground, supported by rising Treasury yields. However, traders remain cautious as the yen is trading near multi-decade lows. Traders worry that BoJ may intervene to provide support to the national currency.

USD/JPY needs to settle above the 162.80 level to gain additional upside momentum in the near term. In this case, USD/JPY will head towards the 165.00 level.

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Forex Forecasts – US Dollar Defends Key 50-Day EMA Across Major PairsUS 10-Year Yield, USD/JPY, Copper and AUD/USD Forecasts – US Rates Continue to Be a FactorUS Dollar Price Forecast: Inflation Risks Lift DXY – Can GBP/USD and EUR/USD Hold Up?About the Author

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.

US Dollar Technical Analysis: Last week could’ve been much worse for the USD given the below-expected CPI and PPI prints, but so far it’s held support at prior resistance. USD/JPY retains bullish breakout potential and that’s probably one of the more attractive bullish majors for the USD this week, while GBP/USD retains bullish potential itself setting up as one of the more attractive for USD-weakness. The big part of the DXY basket is in view this week with the ECB rate decision and EUR/USD has seen the sell-off stall over the past few weeks, with 1.1500 as a major barrier level on pullback scenarios.

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USD Last week was one of those episodes where it could’ve went very differently for the US Dollar, as below-expected CPI and PPI highlighted less urgency for the rate hikes that have been priced in for later this year.

That has not come to pass, however, as the Tuesday and Wednesday pullback led to a rally in the Greenback, and so far this week, that move has continued. From the weekly chart below we can see the DXY basket holding support at prior resistance and this again points to bullish technical structure.

For this week, the big item is the European Central Bank rate decision and the EUR/USD pair remains in an unsettled place, as the bearish trend and fresh lows have been on pause for the past few weeks, but buyers have seemingly been unable to prod for re-test of the 1.1500 handle. That will likely be the big driver for the USD for this week.

US Dollar Weekly Price Chart Chart prepared by James Stanley; data derived from Tradingview EUR/USD In last week’s USD webinar, I looked at three different resistance areas in EUR/USD, and so far the most nearby has held the highs at 1.1469. But the bigger question is whether there’s now enough motivation from bears to finally break through to a fresh low, as that’s been the lacking component going back to late-June and while the daily chart looks messy, the weekly chart highlights this well. This is why we have the old saying in charting of ‘when in doubt, zoom out.’

EUR/USD Weekly Chart Chart prepared by James Stanley; data derived from Tradingview EUR/USD Daily From the daily chart we can see that counter-trend motive well and while messy, this can be argued as a bear flag type of formation given the bullish counter-trend grind over the past few weeks.

Given the ECB meeting on the calendar, this would seem opportune time for the larger trend to present itself, which would point to further DXY strength as the Euro is a whopping 57.6% of the DXY basket. The next resistance level up, the price that bulls have not wanted to encroach upon yet since breaking below a moth ago, is at the 1.1500 level.

EUR/USD Daily Chart Chart prepared by James Stanley; data derived from Tradingview USD/JPY The Japanese Yen is the second largest component of the DXY basket and the Japanese Yen weakness theme remains as a big part of the relative strength in the USD. At this point, the USD/JPY pair holds an ascending triangle formation, which is a bullish breakout formation that points to the possibility of topside breakouts and trend continuation.

As looked at last week, the 165 level is the next major level up and that’s a price that hasn’t traded in USD/JPY since 1986. But – central to that bullish reaction in DXY after PPI and CPI was a similar outing in USD/JPY, and I had looked at this possibility on Monday, highlighting that trend traders could view that weakness as opportunity, which so far they have.

USD/JPY Daily Price Chart Chart prepared by James Stanley; data derived from Tradingview GBP/USD While the EUR/USD sell-off has stalled over the past few weeks but the pair showing an inability to climb above 1.1500, GBP/USD has sprung into what could be argued as a bullish trend given a recent higher-high.

I looked into the pair last week and highlighted three support areas. The first of those areas has so far helped to hold the lows around 1.3450. The second, just below, spans from a Fibonacci level at 1.3390 up to 1.3400, and the third is a prior swing around 1.3325.

For those looking to take bearish stances on the USD this stands out as one of the more attractive major pairs currently available.

GBP/USD Daily Price Chart Chart prepared by James Stanley; data derived from Tradingview --- written by James Stanley, Senior Market Analyst, Global Macro

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Dollar Index Price Chart – Source: Tradingview The US dollar trades near 100.75 on the 4-hour chart following a relief from near 100.35 last week. Price has a clear trendline overhead that caps the move, plus price trades near and below 50-EMA (100.84) & 100-EMA (100.84), so the overall near-term move seems still under pressure despite the recent relief.

The first resistance is at 100.89, which is the trendline and at the 61.8% retracement level. If price can sustain a move past 100.89, the target will be 101.03, then 101.22, and 101.46. The nearest support is at 100.69. Further support will be near 100.61, 100.51, then the recent support near 100.35. The RSI is at about 49 and it indicates that the market momentum is balanced at current price as the buyers and sellers are having equal strength at this time.

For now, my view is that DXY is consolidating beneath the resistance and trendline. If price can get above the trendline, then the chance of broader recovery will get more favorable. If sellers push price away from current level, then there will be higher chance of seeing another test of 100.61 and 100.35 support.

GBP/USD Technical Analysis: Bullish Structure Above The Rising Trendline

British Pound holds steady near 1.3450 as US-Iran strikes intensifyThe GBP/USD pair trades on a flat note around 1.3450 during the early Asian session on Monday. Traders continue to assess the developments surrounding US-Iran tensions after the US said that a third American troop was killed in the past two days. The UK employment report will be in the spotlight later on Tuesday.

The US reported the death of another American service member, who was killed in northern Iraq during the controlled detonation of a downed Iranian drone. US Central Command (CENTCOM) also said on Sunday that it has located unidentified remains in Jordan, where a separate Iranian attack left two US troops dead and one missing in action, per Bloomberg. Read more...

British Pound slips for second straight day as Oil spike revives inflation fearsThe Pound Sterling retreats during the North American session, down 0.22% against the Greenback, as geopolitical tensions remained high, triggering a jump in Oil prices and heightening fears of a reacceleration of inflation. The GBP/USD trades at 1.3449 after peaking near 1.3480.

Hostilities in the Middle East continued with the US attacking Iranian infrastructure, according to Iran’s army spokesperson, who warned that attacks on Oil facilities could trigger retaliation, saying that “either all countries in the region can export Oil or no one can.” As tensions rose, Oil prices jumped, with WTI, the US crude Oil benchmark, gaining over 1.50% to $80.78 per barrel. Read more...

British Pound: Burnham policy hopes underpin Sterling against US Dollar – ScotiabankScotiabank’s Shaun Osborne and Eric Theoret notes GBP/USD is lower on the day and well off its one-year high reached on optimism that incoming PM Burnham will pursue market-friendly policies. Despite late-week slippage, that view remains. The new government is expected to allow new North Sea drilling and bring Thames Water back under public control, while trend oscillators stay bullish and analysts look for firm support near 1.34.

"Sterling is down on the day and well off the 1-year peak seen earlier this week around optimism that Burnham—who takes over as PM next week—will follow market friendly policies. Despite the pound’s late week slippage, that outlook appears to remain intact." Read more...

US Dollar Talking Points: The USD retains a bullish lean from daily and weekly charts and that has held over the past week despite below-expected inflation data on Tuesday and Wednesday. As looked at in the Tuesday webinar, the response to counter-trend stimuli is telling for trend construction, and the question for next week is whether EUR/USD bears can make a push-lower as the pair has stalled just below the 1.1500 handle. The true test of trend is what happens in the face of counter-trend stimuli. Do bulls come in to defend the higher-low, looking at the sell-off as opportunistic? Or do they cut bait and run, allowing for further support breaks and an opening door for reversal potential.

We had such a scenario this week in the USD, where both CPI and PPI printed below expectations. Markets are still primed for rate hike potential into the end of the year and that’s helped to keep the USD in a bullish spot from both weekly and daily charts.

US Dollar Weekly Chart Chart prepared by James Stanley; data derived from Tradingview With US rate hike expectations still holding despite that below-expected CPI and PPI data, USD/JPY retains breakout potential.

I looked into this one in-depth on Monday, highlighting the fact that a below-expected inflation print could allow for pullback, which is what happened. And then buyers jumped on the bid which further highlights bullish continuation potential as there’s now been a continuation of higher-lows.

At this point, buyers haven’t yet wanted to test beyond the 163 level, and that’s helped to create a symmetrical triangle which normally is a non-directional formation. But given the prior trend, that triangle points to a bull pennant formation, which retains a topside bias for continuation scenarios and this remains my most attractive venue for USD-strength.

USD/JPY Daily Price Chart Chart prepared by James Stanley; data derived from Tradingview EUR/USD For next week, I think EUR/USD carries a lot of weight for the USD and in-turn, major FX pairs. There’s an ECB rate decision on Thursday and since the breakdown in the pair in late-June, there’s been stalling over the past few weeks. So far, we’ve had a hold of resistance around 1.1469, but the higher-lows that have built over the past few weeks suggest that the move is already well priced-in and I think ideally, a counter-trend move with a test up to or around 1.1500 could make for a more attractive backdrop for bears.

There’s the risk of a short-squeeze type of scenario, as well, so I want to circle a deeper resistance zone in that event and for that, there’s a prior support-turned-resistance area running from 1.1576 up to 1.1613.

EUR/USD Daily Chart Chart prepared by James Stanley; data derived from Tradingview GBP/USD For USD-weakness, I’m still in favor of GBP/USD and the pair put in another fresh high this week even as the USD held support at prior resistance. For next week, it’s UK CPI on Wednesday that’s the big focal point and I had looked into the pair in the Wednesday article, with GBP/USD having since held support at the ‘s1’ area on the chart, around 1.3450.

Deeper support remains around the 1.3390 Fibonacci level up to the 1.3400 zone, and then the 1.3325 level is the ‘s3’ and if bulls can’t hold prices above that, then USD-strength has probably taken over and the breakout USD/JPY would be a more attractive venue to track that theme, in my opinion.

GBP/USD Daily Price Chart Chart prepared by James Stanley; data derived from Tradingview --- written by James Stanley, Senior Market Analyst, Global Macro

Scotiabank’s Shaun Osborne and Eric Theoret notes GBP/USD is lower on the day and well off its one-year high reached on optimism that incoming PM Burnham will pursue market-friendly policies. Despite late-week slippage, that view remains. The new government is expected to allow new North Sea drilling and bring Thames Water back under public control, while trend oscillators stay bullish and analysts look for firm support near 1.34.

Political shift and technical support at 1.34"Sterling is down on the day and well off the 1-year peak seen earlier this week around optimism that Burnham—who takes over as PM next week—will follow market friendly policies. Despite the pound’s late week slippage, that outlook appears to remain intact."

"The Burnham government looks poised to strike out in a different direction than Starmer’s. Reports suggest that he will permit new drilling permits for oil and gas in the North Sea (Labour under Starmer veered away from boosting North Sea energy) and will announce plans to take the troubled Thames Water utility back under public control (Starmer preferred a private sector solution). President Trump will like the “drill, baby drill” look to the new government, at least."

"Neutral/bullish—Solid gains in the GBP Wednesday have partially reversed over the balance of the week. Trend oscillators lean bullish on the intraday, daily and weekly DMIs which should help sustain the broader trend higher going forward."

"We look for firm support on dips to the 1.34 zone."

(This article was created with the help of an Artificial Intelligence tool and reviewed by an editor. Know more.)

Summary:

GBP/USD eased toward 1.3400 as investors sought the safety of the US dollar following renewed US-Iran tensions. The British pound struggled to build on recent gains despite signs that the UK economy is stabilising and a new Labour government pledging a pro-business agenda. Markets are now looking to next week's UK inflation and employment data for clues on the Bank of England's next interest rate decision. The GBP/USD exchange rate edged lower on Friday as renewed demand for the US dollar outweighed support for the British pound from improving UK economic data and political developments.

Sterling had strengthened earlier this week after softer US inflation data weakened the dollar. However, sentiment shifted as escalating military tensions between the United States and Iran lifted crude oil prices and revived fears that inflation could remain elevated for longer.

That has driven investors back into the US dollar, leaving the pound on the defensive despite encouraging signs from the UK economy.

Why Is GBP/USD Falling Today? The main driver behind Friday’s decline in GBP/USD has been a renewed flight to safety.

The conflict between the United States and Iran has intensified, raising concerns over global oil supplies and pushing crude prices sharply higher. Rising energy prices threaten to reverse recent progress on inflation, prompting investors to reconsider expectations that the Federal Reserve will begin cutting interest rates in the near future.

The US dollar typically benefits during periods of geopolitical uncertainty because it remains the world’s primary reserve currency and one of the most widely used safe-haven assets. As demand for the greenback increased, GBP/USD came under renewed selling pressure.

Is the British Pound Overvalued Against the US Dollar? Another factor weighing on sentiment is growing concern that sterling’s recent rally may have gone too far. Analysts at ING argue that the pound is trading above its short-term fair value after markets priced in aggressive expectations for additional Bank of England tightening.

The bank believes investors have become overly optimistic about UK interest rates and expects EUR/GBP to move back toward 0.870 over the coming months, implying broader weakness in sterling.

If expectations for further Bank of England tightening continue to fade, the British pound could struggle to maintain its recent gains against the US dollar.

Will UK Inflation and the Bank of England Move GBP/USD? Attention is now turning to next week’s UK inflation and labour market reports, which could prove decisive for the direction of GBP/USD.

If inflation remains stubbornly high or wage growth surprises to the upside, investors may increase expectations that the Bank of England will keep interest rates elevated for longer, supporting the pound.

Conversely, weaker economic data would strengthen the case for policy easing and could add further pressure to sterling. At the same time, traders will continue monitoring Federal Reserve commentary, US inflation trends and developments in the Middle East, all of which remain key drivers of the US dollar.

GBP/USD Outlook The near-term outlook for GBP/USD will depend on which narrative dominates financial markets.

If geopolitical tensions continue to fuel higher oil prices and Treasury yields, the US dollar is likely to remain well supported. However, if UK inflation proves more persistent than expected and the Bank of England maintains a hawkish stance, sterling could recover some of its recent losses.

With monetary policy expectations evolving on both sides of the Atlantic, upcoming economic data and geopolitical headlines are likely to determine the next move in GBP/USD.

Why is GBP/USD falling today?

GBP/USD is falling as renewed US-Iran tensions have increased demand for the US dollar, while higher oil prices have raised concerns that inflation could remain elevated, supporting expectations for higher US interest rates.

Will Andy Burnham’s policies affect the British pound?

Investors are watching Andy Burnham’s economic agenda closely because government fiscal policy can influence inflation, economic growth and Bank of England interest rate decisions, all of which affect the value of the British pound.

What could move GBP/USD next?

The next major catalysts for GBP/USD include UK inflation and employment data, Bank of England policy expectations, Federal Reserve commentary and any escalation in geopolitical tensions that could strengthen demand for the US dollar.

The British Pound (GBP) extends its decline against the US Dollar (USD) for the second straight day on Friday, trading 0.4% lower to near 1.3427 during the European trading session on Friday. The GBP/USD pair faces selling pressure as the British currency weakens amidst the process of the United Kingdom (UK) leadership change.

Pound Sterling Price Today The table below shows the percentage change of British Pound (GBP) against listed major currencies today. British Pound was the weakest against the Swiss Franc.

USDEURGBPJPYCADAUDNZDCHFUSD0.12%0.33%-0.03%-0.04%0.40%0.23%-0.13%EUR-0.12%0.21%-0.17%-0.19%0.26%0.11%-0.25%GBP-0.33%-0.21%-0.37%-0.41%0.03%-0.09%-0.47%JPY0.03%0.17%0.37%-0.02%0.44%0.24%-0.10%CAD0.04%0.19%0.41%0.02%0.46%0.29%-0.08%AUD-0.40%-0.26%-0.03%-0.44%-0.46%-0.18%-0.53%NZD-0.23%-0.11%0.09%-0.24%-0.29%0.18%-0.36%CHF0.13%0.25%0.47%0.10%0.08%0.53%0.36% The heat map shows percentage changes of major currencies against each other. The base currency is picked from the left column, while the quote currency is picked from the top row. For example, if you pick the British Pound from the left column and move along the horizontal line to the US Dollar, the percentage change displayed in the box will represent GBP (base)/USD (quote).

Andy Burnham becomes Labour leader on Friday, but he will not become Prime Minister (PM) until Monday, as PM Keir Starmer will officially deliver his resignation to King Charles that day,

While the Pound Sterling has been underperforming from Thursday, it is set to end the week on a positive note. The currency performed strongly earlier this week after reports from Financial Times (FT) that incoming PM Burnham will name Shabana Mahmood as Finance Minister (FM), who is considered a fiscal conservative by financial markets.

On the economic data front, investors await the UK employment data for the three months ending May and the Consumer Price Index (CPI) data for June, which will be released next week.

Meanwhile, the US Dollar trades marginally higher amid fears of a resurgence in United States (US) inflation amid elevated energy prices on the back of continued aggression in the Middle East.

GBP/USD technical analysis

GBP/USD trades sharply lower at around 1.3430. However, the pair maintains a modest bullish bias as spot remains above the 20-day exponential moving average (EMA) at 1.3380. The pair declines after facing selling pressure near the downward-sloping border of the Descending Triangle formation above 1.3500.

The Relative Strength Index (14) at 54.9 sits in neutral-positive territory, hinting that buying pressure is constructive but not yet overextended.

On the downside, immediate support is located at the 20-day EMA around 1.3380, where a sustained break would undermine the current positive tone and expose a deeper correction towards 1.3300. On the topside, the first key obstacle is the descending resistance trend line near 1.3515; a daily close above this barrier would reinforce the bullish bias and open the door to further gains in the days ahead.

(The technical analysis of this story was written with the help of an AI tool. Know more.)

Pound Sterling FAQs The Pound Sterling (GBP) is the oldest currency in the world (886 AD) and the official currency of the United Kingdom. It is the fourth most traded unit for foreign exchange (FX) in the world, accounting for 12% of all transactions, averaging $630 billion a day, according to 2022 data. Its key trading pairs are GBP/USD, also known as ‘Cable’, which accounts for 11% of FX, GBP/JPY, or the ‘Dragon’ as it is known by traders (3%), and EUR/GBP (2%). The Pound Sterling is issued by the Bank of England (BoE).

The single most important factor influencing the value of the Pound Sterling is monetary policy decided by the Bank of England. The BoE bases its decisions on whether it has achieved its primary goal of “price stability” – a steady inflation rate of around 2%. Its primary tool for achieving this is the adjustment of interest rates. When inflation is too high, the BoE will try to rein it in by raising interest rates, making it more expensive for people and businesses to access credit. This is generally positive for GBP, as higher interest rates make the UK a more attractive place for global investors to park their money. When inflation falls too low it is a sign economic growth is slowing. In this scenario, the BoE will consider lowering interest rates to cheapen credit so businesses will borrow more to invest in growth-generating projects.

Data releases gauge the health of the economy and can impact the value of the Pound Sterling. Indicators such as GDP, Manufacturing and Services PMIs, and employment can all influence the direction of the GBP. A strong economy is good for Sterling. Not only does it attract more foreign investment but it may encourage the BoE to put up interest rates, which will directly strengthen GBP. Otherwise, if economic data is weak, the Pound Sterling is likely to fall.

Another significant data release for the Pound Sterling is the Trade Balance. This indicator measures the difference between what a country earns from its exports and what it spends on imports over a given period. If a country produces highly sought-after exports, its currency will benefit purely from the extra demand created from foreign buyers seeking to purchase these goods. Therefore, a positive net Trade Balance strengthens a currency and vice versa for a negative balance.

The Pound to Dollar (GBP/USD) exchange rate weakened on Thursday as escalating conflict in the Middle East drove investors towards the safe-haven US Dollar despite another positive UK political development.

At the time of writing, GBP/USD was trading at $1.3499, down around 0.3% on the day.

Latest — Exchange Rates:
Pound to Dollar (GBP/USD): 1.347769 (-0.46%)
Euro to Dollar (EUR/USD): 1.14428 (-0.23%)
Dollar to Yen (USD/JPY): 162.36824 (+0.19%)

DAILY RECAP:

The safe-haven US Dollar (USD) found some support on Thursday, as escalating tensions in the Middle East soured the market mood.

Sentiment had been relatively resilient since the US and Iran renewed hostilities, but with the fighting intensifying, risk appetite began to fade.

The US expanded its attacks into northern Iran, with strikes also hitting around the Iranian capital of Tehran.

US President Donald Trump also threatened to target Iranian infrastructure, such as bridges, with Tehran vowing to retaliate by targeting infrastructure in US-allied Gulf states.

With the conflict escalating, the US Dollar firmed amid renewed safe-haven demand.

Meanwhile, the Pound (GBP) edged lower as Sterling gave back part of the strong gains it posted in the previous session.

The UK currency had surged on Wednesday after reports suggested Shabana Mahmood had overtaken Ed Miliband as the leading contender to become Chancellor under incoming Prime Minister Andy Burnham.

Markets had been uneasy about the prospect of Miliband taking the role, amid expectations he could favour looser fiscal policy. By contrast, Mahmood is viewed as a more fiscally orthodox choice, with reports of her likely appointment proving reassuring for investors.

Even so, Sterling was unable to extend its advance on Thursday, despite UK GDP data matching expectations with a modest 0.1% expansion in May.

Instead, traders appeared to lock in profits after the previous day's rally, leaving the Pound on the back foot.

Near-Term GBP/USD Forecast: Consumer Confidence to Support the US Dollar? Looking ahead, the key data release on Friday will be the University of Michigan’s latest consumer sentiment index in the US.

Markets expect American household morale to have improved in July, with the index set to rise from 49.5 to 51. This could underpin the US Dollar.

Meanwhile, market risk appetite may also influence the safe-haven ‘Greenback’. If geopolitical tensions escalate further, an anxious mood may support USD.

As for the Pound, a lack of UK data could limit Sterling. That said, political optimism may continue to provide some support for GBP.

United Overseas Bank (UOB) strategists Quek Ser Leang and Christopher Wong note GBP/USD has corrected sharply from recent highs near 1.3556 but now looks set to consolidate between 1.3450 and 1.3520 intraday. The 1–3 week outlook still sees renewed upward momentum, with 1.3590 as a key level to monitor, while a break below 1.3450 would point to a period of consolidation before any further gains.

Pound steadies after sharp retreat"24-HOUR VIEW: Two days ago, GBP surged to a high of 1.3556. Yesterday, when GBP was at 1.3540, we indicated the following: “The sharp rally appears excessive, but with no sign of pause yet, GBP could continue to rise. However, given the deeply overbought conditions, any advance could be limited to a test of 1.3560.” Our assessment turned out to be incorrect, as GBP did not test 1.3560. Instead, it retreated sharply to a low of 1.3460 before closing 0.43% lower at 1.3480. The sharp pullback has stabilised somewhat, and instead of continuing to decline today, GBP is more likely to trade in a range between 1.3450 and 1.3520."

"1-3 WEEKS VIEW: After GBP surged on Wednesday, we indicated yesterday (16 Jul, spot at 1.3540) that “the renewed upward momentum suggests that GBP has resumed its advance.” We also highlighted that “the level to monitor is 1.3590.” We did not expect GBP to pull back sharply to 1.3460. Upward momentum has eased somewhat, and a breach of 1.3450 (no change in ‘strong support’ level) would suggest that GBP could consolidate first before pushing higher."

(This article was created with the help of an Artificial Intelligence tool and reviewed by an editor. Know more.)

Scotiabank strategists Shaun Osborne and Eric Theoret note GBP/USD is slightly weaker as it gives back part of yesterday’s strong advance, helped by expectations of a centrist, market-friendly Burnham government. United Kingdom (UK) data were mixed, with robust Gross Domestic Product (GDP) offset by softer Industrial Production. From a technical perspective, they argue the early July bull reversal remains intact and see scope for gains toward at least 1.3650.

Bull trend targets retest of 1.3650"The GBP is a mild underperformer on the session as markets give back some of yesterday’s solid gains. Investors appear to have been cheered by reports suggesting that team Burnham has vetoed Ed Miliband as an option for chancellor, preferring instead current Home Sec. Mahmood."

"PM-to-be Burnham’s rumored top team is going to be centrist which also means market-friendly. But that will ruffle feathers of left-wingers who effectively pushed Starmer out."

"UK data released earlier was mixed. UK May GDP was stronger than forecast, rising 0.7% in 3m/3m terms. The UK economy saw solid growth in H1 overall. But May Industrial Production was weaker than expected (-0.5% M/M), albeit with very mixed components while the Trade deficit narrowed."

"Bullish—Sterling has given back a little of yesterday’s solid gain but the spurt higher has livened up the charts and sets the pound up for a further extension of the early July bull reversal."

"The fresh short-term cycle high and a bullish alignment of short-, medium-, and long-term trend oscillators suggest minor dips are a buy and that GBP gains can extend towards a retest of 1.3650 at least in the near-term. EUR/GBP is trading back from yesterday’s one-year low but technical trends here also look positive for the pound overall."

(This article was created with the help of an Artificial Intelligence tool and reviewed by an editor. Know more.)