Scotiabank strategists Shaun Osborne and Eric Theoret note GBP/USD is steady after reaching a one-week high, with the British Pound (GBP) supported by rising Bank of England (BoE) tightening expectations and sensitivity to higher Oil prices. Markets see little chance of a move next week but price incremental hikes into year-end. They highlight a clear bullish trend from June, with resistance near 1.3650 and support around 1.3480.
Pound holds bullish trend despite fiscal risks"The pound is also entering Wednesday’s NA session unchanged vs. the USD after – also – hitting a fresh one week high. As with the EUR and the ECB, we note the GBP and BoE’s greater sensitivity to oil price gains as policymakers seek to achieve their price stability mandates."
"The short-term rates market is still pricing very little chance of a policy adjustment at next Thursday’s meeting, but pricing about 17bpts of tightening for November 5th and a cumulative 32bpts by December 17th."
"Fiscal risk remains elevated as market participants look to the release of the UK budget in late October. In terms of data, we continue to note the absence of any material releases ahead of Friday’s trade and industrial production figures."
"Neutral/bullish – the RSI is marginally above 50 but showing fractional gains reflecting the latest recovery in spot over the past week or so. The magnitudes are minimal."
"The daily chart reveals a clear bullish trend from June with a sequence of higher lows and higher highs. We note the absence of any material resistance ahead of 1.3650 and see support closer to 1.3480."
(This article was created with the help of an Artificial Intelligence tool and reviewed by an editor. Know more.)
GBP/USD Price Forecast: Strengthens above 1.3550, upside bias intact while holding above 100-day SMAThe GBP/USD pair trades in positive territory around 1.3550 during the early European trading hours on Wednesday. UK Chancellor John Healey unveiled a series of measures designed to encourage economic growth and draw more private investment into the UK. This move provides some support to the British Pound (GBP) against the US Dollar (USD).
UK Chancellor on Monday announced plans to give city regions greater powers to attract private investment as part of Prime Minister Andy Burnham's plan to devolve power away from central government. Healey also stressed his commitment to fiscal discipline and to curbing rising costs for business and the public, including a 25% reduction in regulatory costs by the next election due in 2029. Read more...
British Pound holds steady near mid-1.3500s vs USD as traders eye UK GDP and US inflationThe GBP/USD pair trades with a positive bias near mid-1.3500s during the Asian session on Wednesday, though it lacks bullish conviction and remains confined within the previous day's broader range. Meanwhile, the downside seems limited as traders await the release of monthly UK GDP and US inflation figures before placing fresh directional bets.
The key focus will be on the US Producer Price Index (PPI) and the Consumer Price Index (CPI), due on Thursday and Friday, respectively. The crucial data will be looked at for more cues about the US Federal Reserve's (Fed) policy path amid rising bets for a September rate hike and will influence the US Dollar (USD) price dynamics. This, in turn, should provide some meaningful impetus to the GBP/USD pair. 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.
Pound-Dollar could remain under pressure if inflation fears keep risk appetite weak, although easing Middle East tensions may help Sterling recover. The Pound US Dollar (GBP/USD) exchange rate drifted lower on Tuesday as renewed global inflation concerns softened market risk sentiment.
At the time of writing, GBP/USD was trading at around $1.3526. Slightly lower than Tuesday’s opening levels.
Latest — Exchange Rates:
Pound to Dollar (GBP/USD): 1.353385 (-0.09%)
Euro to Dollar (EUR/USD): 1.162206 (-0.05%)
Dollar to Yen (USD/JPY): 154.36911 (+0.35%)
DAILY RECAP:
The US Dollar (USD) firmed on Tuesday as a fresh surge in energy prices revived concerns over global inflation and underpinned demand for the safe-haven ‘greenback’.
Brent crude approached the $100-per-barrel mark on Tuesday morning, following targeted strikes against Saudi energy facilities.
Markets fear a fresh energy price shock will quickly feed through into higher consumer and producer prices, with the rise in inflation pushing central banks around the global into tightening monetary policy to counter the inflationary pressures.
However, the US Dollar's upside potential ultimately remained limited amid some caution ahead of this week's US inflation data, which will be key in setting expectations for whether the Federal Reserve will hike interest rates next week.
The fresh spike in crude oil also dampened appetite for the Pound (GBP) on Tuesday as it pushed UK gilt yields higher.
As global inflation concerns intensified, government borrowing costs rose, with yields on the UK benchmark 10-year gilt rising around 0.3%, propelling yields just shy of the multi-year highs struck during last week's bond market turmoil.
Higher yields will complicate matters for Chancellor John Healey. Straining the government's debt-servicing capacity, the move narrows the Treasury's fiscal wriggle room just weeks before the October Budget.
Near-Term GBP/USD Forecast: Limited Data to Drive the Pairing? Looking ahead, the absence of any notable UK or US macroeconomic data could leave movement in the Pound to US Dollar (GBP/USD) exchange rate to be driven by wider market trends through the middle of the week.
If the market remains gripped by inflation concerns, it's likely to further erode investor risk appetite and underpin demand for safe-haven assets like the US Dollar.
On the other hand, any easing of tensions in the Middle East could swiftly trigger a reversal in the recent energy price spike, both tempering USD demand and boosting Sterling sentiment if it brings UK bond yields back down.
Exchange Rates UK Research Our currency coverage draws on live market data, official economic releases and published bank research.
The GBP/USD pair trades in positive territory around 1.3550 during the early European trading hours on Wednesday. UK Chancellor John Healey unveiled a series of measures designed to encourage economic growth and draw more private investment into the UK. This move provides some support to the British Pound (GBP) against the US Dollar (USD).
UK Chancellor on Monday announced plans to give city regions greater powers to attract private investment as part of Prime Minister Andy Burnham's plan to devolve power away from central government. Healey also stressed his commitment to fiscal discipline and to curbing rising costs for business and the public, including a 25% reduction in regulatory costs by the next election due in 2029.
The Bank of England (BoE) is expected to hold the interest rate at 3.75% for the rest of the year and through at least mid-2027, according to a Reuters poll. BoE Governor Andrew Bailey said on Tuesday he wanted to dispel the idea that it's just a matter of time before the central bank hikes interest rates, rather than a possibility that hinges on economic and geopolitical developments.
GBP upside bias builds but UOB keeps Pound in broad rangeAnalysts at UOB Group note that GBP/USD was confined to a relatively tight band at the end of last week, with the Pound “traded between 1.3482 and 1.3550 last Friday and closed little changed at 1.3518 (-0.05%).” They recall that “the price action did not lead to any shift in either downward or upward momentum,” and had expected GBP “to trade in a range between 1.3490 and 1.3540.” In the event, the pair “did not quite trade within the expected range, as it edged up from 1.3508 to 1.3547.”
While UOB still sees “no significant increase in upward momentum,” the bank judges that “the bias for GBP today appears tilted to the upside, likely toward 1.3565,” though it “do[es] not expect the major resistance at 1.3600 to come into view.” On the downside, the strategists flag that “a breach of 1.3520 (minor support is at 1.3530) would mean that the upside bias has faded.”
From a broader perspective, UOB reiterates that “there is not much to add” to its recent medium-term assessment, with GBP “neutral now and it is likely to trade between 1.3480 and 1.3600” over the next one to three weeks.
Technical Analysis: GBP/USD retains a bullish tone above the 100-day SMAIn the daily chart, GBP/USD holds a mild bullish bias as price remains above the 100-day Simple Moving Average (SMA) and the lower Bollinger Band, suggesting underlying demand on dips. However, spot is now just under the Bollinger mid-line, which acts as immediate resistance, while the Relative Strength Index (RSI) near 54 points to steady but not overextended bullish momentum.
On the topside, a daily close above the Bollinger middle band at 1.3560 would open the way toward the upper band resistance near 1.3660. Further north, the next hurdle to watch is the 1.3700 psychological level.
On the downside, initial support is seen at the lower Bollinger Band around 1.3465, ahead of stronger structural backing from the 100-day SMA at 1.3445, where buyers would be expected to defend the broader upbeat tone.
(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.
Scotiabank strategists Shaun Osborne and Eric Theoret describe GBP/USD as slightly softer but supported by expectations of further Bank of England (BoE) tightening into year-end. With limited data before Friday’s trade and industrial production releases, markets price incremental hikes for November and December. They highlight a bullish medium-term trend, yet see the pair constrained in a near-term 1.3500–1.3600 range as traders watch fiscal risks into the Autumn Statement.
Pound supported but range bound"As with EUR and the ECB, the outlook for relative central bank policy remains supportive for the pound, given expectations for tightening into year-end."
"The September 17 meeting offers little, however short term rates markets are currently pricing in 16bpts of tightening for November 5th, and just over 30bpts for December 17th."
"Political developments have been limited and we continue to highlight the risk of sentiment-related movement tied to fiscal risks into the Autumn Statement (budget) scheduled for late October."
"The medium-term trend is bullish, with a clear sequence of higher lows and higher highs since late June."
"We look to a near-term range bound between 1.3500 and 1.3600."
(This article was created with the help of an Artificial Intelligence tool and reviewed by an editor. Know more.)
Key Points:EUR/USD is swinging between gains and losses as traders react to Germany's Exports data. USD/CAD made an attempt to settle below the support at 1.3750 - 1.3765.USD/JPY rebounded from session lows as traders focused on rising Treasury yields.
EUR/USD
-0.02%
EUR/USD ForecastGBP/USD
-0.07%
GBP/USD ForecastUSD/CAD
-0.13%
USD/CAD ForecastUSD/JPY
+0.28%
USD/JPY Forecast
U.S. Dollar Attempts To Rebound After Recent Pullback
DXY 080926 4h Chart U.S. Dollar Index moved away from session lows as traders focused on rising Treasury yields. The yield of 2-year Treasuries climbed towards the 4.40% level, while the yield of 10-year Treasuries settled near 4.80%.
I’d note that Bessent’s buyback efforts have so far failed to push yields of longer-dated bonds lower. The yield of 30-year Treasuries settled near 5.25%, close to the critical 5.30% level.
In case U.S. Dollar Index climbs above the 99.00 level, it will head towards the nearest resistance level, which is located in the 99.25 – 99.40 range.
EUR/USD Stays Above The 1.1600 Level EUR/USD 080926 4h Chart EUR/USD is mostly flat as traders focus on Germany’s Exports report. The report showed that Exports decreased by -0.8% month-over-month in July, compared to analyst forecast of 0%.
I believe that traders are already cautious ahead of the ECB Interest Rate Decision, which will be released on Thursday.
The nearest support level for EUR/USD is located in the 1.1600 – 1.1615 range. If EUR/USD manages to settle below the 1.1600 level, it will head towards the next support level at 1.1500 – 1.1515. RSI is in the moderate territory, so there is plenty of room to gain momentum in case the right catalysts emerge.
GBP/USD Attempts To Settle Above 1.3565 GBP/USD 080926 4h Chart GBP/USD continues its attempts to settle above the resistance level at 1.3550 – 1.3565 as traders focus on the BRC Retail Sales Monitor report from the UK. The report showed that Retail Sales increased by +0.5% year-over-year in August, compared to analyst forecast of +1.2%.
If GBP/USD manages to settle above the 1.3565 level, it will head towards the next resistance, which is located in the 1.3635 – 1.3650 range. On the support side, a move below the 50 MA at 1.3533 will push GBP/USD towards the next support at 1.3470 – 1.3485.
USD/CAD Rebounds From Session Lows
USD/CAD 080926 4h Chart USD/CAD moved lower as traders focused on U.S. – Canada trade war. Canada’s Prime Minister Mark Carney said that counter-tarrifs against the U.S. were necessary to protect Canadian businesses. Interestingly, the market does not believe that the trade war is a negative catalyst for the Canadian currency.
From the technical point of view, USD/CAD made an attempt to settle below the support level at 1.3750 – 1.3765 but lost momentum and rebounded towards the 1.3790 level. In case USD/CAD settles back above 1.3800, it will head towards the nearest resistance at 1.3825 – 1.3840. A successful test of this level will push USD/CAD towards the next resistance at 1.3900 – 1.3915.
USD/JPY Climbed Back Above 154.00 Amid Rising Treasury Yields USD/JPY 080926 4h Chart USD/JPY attempts to rebound after the strong sell-off as traders react to rising Treasury yields and focus on Japan’s second-quarter GDP Growth Rate report. The report showed that Japan’s GDP Growth Rate was +0.4%, in line with analyst estimates.
Traders try to guess whether BoJ is ready to intervene again at current levels or the Bank has finished its interventions. The expectations of a rate hike from the BoJ served as an additional bullish catalyst for the yen in recent trading sessions, but Fed may also raise rates at the meeting on September 16.
In case USD/JPY stays above the 154.00 level, it will head towards the resistance level at 155.00 – 155.50. A move above the 155.50 level will open the way to the test of the resistance level at 157.50 – 158.00.
If you’d like to know more about how to trade forex, please visit our educational area.
Related Articles
USD/JPY at Inflection Point as Copper Eyes Record HighUS Dollar Price Forecast: Fed Hike Bets Rise as ECB Tightening Supports Euro; EUR/USD and GBP/USD Key LevelsU.S. Dollar Tests New Lows Against Japanese Yen: Analysis For EUR/USD, GBP/USD, USD/CAD, USD/JPY
Vladimir is an independent trader, with over 18 years of experience in the financial markets. His expertise spans a wide range of instruments like stocks, futures, forex, indices, and commodities, forecasting both long-term and short-term market movements.
The Pound Sterling (GBP) registers modest gains of over 0.08% on Tuesday as Bank of England (BoE) policymakers testify before the UK Treasury Select Committee, while a light economic docket in the US keeps the Greenback with a negative tone. The GBP/USD pair trades at 1.3548 after bouncing off the daily low of 1.3521. Read More...
GBP/USD Price Forecast: Consolidates below mid-1.3500s; bullish potential seems intactThe GBP/USD pair struggles to capitalize on the previous day's modest gains and oscillates in a range below mid-1.3500s during the Asian session on Tuesday. The downside, however, remains cushioned as the US Dollar (USD) selling remains unabated on the back of a broadly firmer Japanese Yen (JPY). Read More...
British Pound drifts higher to near 1.3550 on UK fiscal discipline pledgesThe GBP/USD pair gains ground to near 1.3545 during the Asian trading hours on Tuesday. The British Pound (GBP) edges higher against the US Dollar (USD) after UK Chancellor John Healey unveiled a series of measures designed to encourage economic growth and draw more private investment into the UK. Read More...
GBP/USD Price Forecast: Consolidates below mid-1.3500s; bullish potential seems intactThe GBP/USD pair struggles to capitalize on the previous day's modest gains and oscillates in a range below mid-1.3500s during the Asian session on Tuesday. The downside, however, remains cushioned as the US Dollar (USD) selling remains unabated on the back of a broadly firmer Japanese Yen (JPY).
That said, firming US Federal Reserve (Fed) rate hike bets, along with geopolitical uncertainties stemming from escalating US-Iran tensions, act as a tailwind for the USD and cap the GBP/USD pair. Traders also seem hesitant ahead of this week's release of the monthly UK GDP and the latest US inflation figures. Read more...
British Pound drifts higher to near 1.3550 on UK fiscal discipline pledgesThe GBP/USD pair gains ground to near 1.3545 during the Asian trading hours on Tuesday. The British Pound (GBP) edges higher against the US Dollar (USD) after UK Chancellor John Healey unveiled a series of measures designed to encourage economic growth and draw more private investment into the UK.
Healey promised to cut regulatory barriers to UK investment and create new testing freedoms for emerging technologies, per the BBC. Additionally, the UK Chancellor on Monday announced plans to give city regions greater powers to attract private investment as part of Prime Minister Andy Burnham's plan to devolve power away from central government. 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.
Inflation concerns dominate the euro this week with the European Central Bank’s (ECB) meeting. All 65 economists in the Reuters poll expect the ECB to increase their deposit rate by 25 basis points to 2.50 percent. Inflation for the Eurozone jumped to 3.3 percent. High energy prices from the Iran conflict drive the inflation.
The discussion is turning to the possibility that September will only be the first in multiple hiking cycles. Deutsche Bank has already adjusted their forecast to include anticipating another hike in December.
Like many central banks, the Bank of England faces challenges with the energy crisis. Inflation risks returning mixed with weaker economies and already tighter financial conditions. Therefore, the Bank of England is likely to look at the energy crisis and global bonds and their corresponding yields to hopefully gain some insights into what their next moves should be. This means that sterling is going to be very volatile to the next set of Bank of England policy updates and how global markets react to those policies. Meanwhile, the greenback side of the GBP/USD will be under the control of the updates to U.S. inflation which will be available this week.
Fundamental bias: DXY neutral-to-bullish, EUR moderately bullish, GBP neutral-to-bullish.
U.S. Dollar Index Technical Analysis: DXY Remains Bearish Below 99.20 as 98.71 Support Comes Into View
Pound-Dollar could stay supported if market sentiment remains stable, although renewed geopolitical tensions may revive safe-haven Dollar demand. The Pound US Dollar (GBP/USD) exchange rate ticked higher on Monday as markets digested UK Chancellor John Healey’s speech on the economy.
At the time of writing, GBP/USD was trading at $1.3536, up around 0.15% on the day.
Latest — Exchange Rates:
Pound to Dollar (GBP/USD): 1.354424 (+0.20%)
Euro to Dollar (EUR/USD): 1.162816 (+0.13%)
Dollar to Yen (USD/JPY): 154.32885 (-1.23%)
DAILY RECAP:
The Pound (GBP) made modest gains on Monday as markets responded to comments from UK Chancellor John Healey.
Healey reaffirmed his focus on maintaining fiscal discipline, seeking to ease concerns that had emerged around recent bond market turbulence. Much of his speech centred on boosting UK economic growth, with government investment, innovation, devolution and cutting red tape highlighted as ways to stimulate activity.
The Chancellor’s remarks appeared to receive a mildly positive response, although the reaction was relatively restrained. Sterling moved higher against a number of its peers, but the gains remained limited.
Meanwhile, the US Dollar (USD) was subdued on Monday as American markets were closed for the Labor Day federal holiday. This seemed to limit the currency’s appeal.
In addition, a mixed market mood stifled movement in the safe-haven ‘Greenback’. Asian markets were upbeat on Monday following reports that Beijing will inject $54bn into state-owned banks and insurers.
Risk sentiment moderated during the European session, but the uncertain tone kept USD muted.
Near-Term GBP/USD Forecast: Risk-Off Mood to Lift the Dollar? Looking forward, market-moving economic data is thin on the ground for both GBP and USD on Tuesday, potentially leaving the Pound to US Dollar exchange rate to be driven by wider market trends.
Risk appetite could be the defining factor for the pairing. Escalating tensions in the Middle East could dampen the market mood and thereby support the safe-haven ‘Greenback’.
Likewise, geopolitical concerns in Europe and a deepening US-Canada trade war could also contribute to risk aversion, which in turn may boost the US Dollar’s appeal.
Exchange Rates UK Research Our currency coverage draws on live market data, official economic releases and published bank research.
The GBP/USD pair struggles to capitalize on the previous day's modest gains and oscillates in a range below mid-1.3500s during the Asian session on Tuesday. The downside, however, remains cushioned as the US Dollar (USD) selling remains unabated on the back of a broadly firmer Japanese Yen (JPY).
That said, firming US Federal Reserve (Fed) rate hike bets, along with geopolitical uncertainties stemming from escalating US-Iran tensions, act as a tailwind for the USD and cap the GBP/USD pair. Traders also seem hesitant ahead of this week's release of the monthly UK GDP and the latest US inflation figures.
From a technical perspective, the GBP/USD pair holds a mild bullish bias above the 200-period Simple Moving Average (SMA) on the 4-hour chart. Moreover, spot prices trade above a dense Fibonacci support stack led by the 38.2% retracement level of the June-August upswing, at 1.3471. Adding to this, a modestly positive Moving Average Convergence Divergence (MACD) and a Relative Strength Index (RSI) hovering around 54 hint that upside momentum is constructive but not yet aggressive.
Meanwhile, the 23.6% retracement at 1.3549 sits just overhead as the next cap. A sustained strength higher would open the way toward further recovery in the broader range. On the downside, initial support is provided by the 200-period SMA at 1.3498, followed by the 38.2% retracement at 1.3471, with deeper floors at the 50.0% level near 1.3408 and the 61.8% retracement around 1.3344 if selling pressure intensifies.
(The technical analysis of this story was written with the help of an AI tool. Know more.)
GBP/USD 4-hour chart
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 rises by over 0.23% amid thin trading conditions, as US markets remained closed for the Labour Day weekend, while the US-Iran conflict escalated, with both countries exchanging strikes around the Strait of Hormuz. The GBP/USD trades at 1.3541. Read More...
British Pound edges higher against US Dollar, UK Chancellor Healey’s speech eyedThe British Pound (GBP) is marginally higher at around 1.3525 against the US Dollar (USD) during the European trading session on Monday. The GBP/USD pair ticks up as the US Dollar struggles to attract bids despite the United States (US) Bureau of Labor Statistics (BLS) posting strong Nonfarm Payrolls (NFP) figures for August. Read More...
GBP/USD Price Forecast: Struggles near 1.3500 amid modest USD uptick; bears seem hesitantThe GBP/USD pair trades with a negative bias for the second straight day, though it lacks bearish conviction and trades around the 1.3500 psychological mark during the Asian session on Monday. Moreover, spot prices hold above Friday's swing low, warranting some caution for bearish traders. Read More...
GBP/USD is rising amid U.S. dollar weakness, whilst sterling is holding steady against the euro as investors digest Finance Minister John Healey's first major economic speech, which failed to provide much direction for the pound.
Healey announced plans to give regions greater power to attract private investment. He stressed his commitment to fiscal discipline and curbing rising costs.
Healey's pledge for fiscal discipline has helped restore the UK's credibility in the international bond market, keeping the 10-year gilt yield around 5.15%. This is some relief after the 10-year gilt yield traded around its highest level since 2008 last week.
Higher borrowing costs have been fuelled by renewed inflation concerns amid the U.S.-Iran conflict and uncertainty over Prime Minister Andy Burnham's spending plans.
Oil prices approached a seven-week high after rising 10% last week as the U.S. struck Iranian oil tankers.
On the data front, UK firms increased full-time hiring in August for the first time in four years.
The BoE is not expected to hike rates next week, but the market does see a rate hike taking place before the end of the year, offering some support to GBP.
USD eases ahead of this week’s CPI
Separately, the U.S. dollar is easing after rising on Friday following a stronger-than-expected nonfarm payroll report.
162,000 jobs were added in August, and the July report was revised higher. The data saw the market increase expectations that the Fed would hike interest rates at next week's September meeting to 65%.
The focus this week will be on U.S. inflation data, with PPI and CPI figures due on Thursday and Friday, respectively.
Higher-than-expected inflation will cement expectations that the Fed will hike rates by 25 basis points next week, boosting the dollar and potentially weighing on GBP/USD.
However, weaker inflation could see the market rein in rate hike expectations, dragging the USD lower and providing further support for sterling.
GBP/USD forecast – technical analysis
GBP/USD trades within a rising channel following its recovery from the 1.3140 June low. After running into resistance at 1.3675, the pair has eased back, finding support at the 50 EMA around 1.3485.
Buyers will look to extend the move above 1.3500, the July high, to turn attention towards 1.3650 and 1.3675, the August peak. A break above 1.3675 would create a higher high, extending the bullish move towards 1.3700.
On the downside, a break below the 50 EMA at 1.3485 would open the door to 1.3450, the falling trendline support, followed by the 200 EMA at 1.3420. Below here, sellers could gain traction towards 1.3350.
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers. The author will not be held responsible for information that is found at the end of links posted on this page.
If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.
FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.
The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.
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 marginally higher at around 1.3525 against the US Dollar (USD) during the European trading session on Monday. The GBP/USD pair ticks up as the US Dollar struggles to attract bids despite the United States (US) Bureau of Labor Statistics (BLS) posting strong Nonfarm Payrolls (NFP) figures for August.
At press time, the US Dollar Index (DXY), which gauges the Greenback’s value against six major currencies, trades subduedly near 99.10, but remains inside Friday’s trading range.
The data showed on Friday that the economy created 162K fresh jobs, significantly higher than 56K estimates. July’s NFP data was also revised higher to 21K from -23K.
Upbeat US NFP data has also led to a slight increase in the Federal Reserve’s (Fed) interest rate expectations.
Fed hike odds rise on strong US jobs dataAnalysts at Commerzbank note that the “main theme last Friday was a stronger-than-expected US employment report, which revived expectations for a September Fed rate hike.” They highlight that “the Fed funds futures increased the probability of a 25bp hike on 16 September to 62% compared with 51% before the employment report
Meanwhile, investors shift their focus to the US Consumer Price Index (CPI) data for August, which will be published on Friday.
Ahead of the US CPI data, Fed board members New York Fed Bank President John Williams and Governor Christopher Waller have signaled that recent data on inflation has been “encouraging” and inflation expectations are contained.
On the British currency front, investors await speech from United Kingdom (UK) Chancellor of the Exchequer John Healey, which will take place during the day, where he is expected to talk about the state of the economy ahead of next month's Budget, according to BBC News.
The note released by strategists at Brown Brothers Harriman (BBH) indicates that remarks from UK Chancellor Healey are expected to revolve around raising taxes and reducing expenditure, in a way to highlight growing fiscal risks.
UK fiscal buffer drive points to tax rises and spending cutsBBH said in a note that UK Chancellor John Healey has pledged to build a solid fiscal “buffer against uncertainty” in the October 28 Budget, a commitment they argue will almost inevitably entail a tighter policy mix. BBH highlights that this objective “points to a mix of tax rises and spending cuts” as higher borrowing costs are estimated to have halved the government’s fiscal headroom to around “£12bn,” underscoring the limited room for manoeuvre on the public finances.
GBP/USD Technical Analysis
In the daily chart, GBP/USD trades at 1.3533. The pair is virtually glued to the 20-day Exponential Moving Average (EMA) at 1.3533, leaving the near-term bias neutral as price oscillates around this pivot rather than clearly above or below it. The upward-sloping trend-line, last broken near 1.3435, still frames the broader advance, while the Relative Strength Index (RSI) at about 52 hints at balanced momentum after the recent pullback from overbought territory.
On the downside, initial support is seen at the EMA pivot around 1.3533, with the former trend-line break area near 1.3435 acting as a deeper structural floor if sellers extend control. With no immediate overhead levels defined in the current setup, a sustained move away from the 20-day EMA—either a bounce that keeps the pair supported above 1.3533 or a clean break back toward 1.3435—would be needed to re-establish a clearer directional bias.
(The technical analysis of this story was written with the help of an AI tool. Know more.)
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 rebound if US inflation cools, although weaker UK growth may keep Sterling vulnerable after last week's bond-market turmoil. Trade in the Pound US Dollar (GBP/USD) exchange rate was volatile last week amid turbulence in the global bond market.
At the time of writing, GBP/USD was trading at around $1.3499. Down around 0.3% from the start of last week’s session.
Latest — Exchange Rates:
Pound to Dollar (GBP/USD): 1.351788 (+0.01%)
Euro to Dollar (EUR/USD): 1.16111 (-0.02%)
Dollar to Yen (USD/JPY): 156.14143 (-0.07%)
DAILY RECAP:
The US Dollar (USD) opened last week's session on strong footing, with the ‘Greenback’ benefiting from a bout of risk aversion as a sell-off in global bond markets spooked investors.
The turmoil in the bond market was driven by renewed concerns over inflation and fiscal sustainability, with surging oil prices adding to fears that central banks could face pressure to keep interest rates higher for longer.
However, the US Dollar began to relinquish its gains in the middle of the week as these fears eased and market risk appetite recovered.
Further losses followed on Thursday after dovish remarks from Federal Reserve policymaker Chris Waller, sparked a repricing of Fed rate hike expectations.
This was followed by a modest rebound in USD exchange rates at the end of the session as US non-farm payrolls smashed expectations in August.
The Pound (GBP) found itself on the defensive throughout much of last week's session, with the currency bearing the brunt of a widespread rout across international bond markets.
Yields on benchmark 10-year UK gilts broke past 5.25% to briefly trade at a 19-year high, whilst the 30-year yield struck its highest levels since 1997.
While part of a broader worldwide bond slump, the moves hit Sterling especially hard due to fears that spiralling debt servicing obligations will drastically eat into Chancellor John Healey's fiscal headroom just as he prepares to deliver his inaugural Autumn Budget.
Near-Term GBP/USD Forecast: US Inflation in the Spotlight Turning to this week's session, the primary catalyst of movement for the Pound to US Dollar exchange rate will likely be the latest US consumer price index.
If August's data points to an easing of inflation, it could raise fresh questions about a Fed rate hike this month and pull the US dollar sharply lower.
Meanwhile, the focus for GBP investors will be on the UK's month-on-month GDP figures for July.
Should the data report a deceleration in growth, it's likely to place more pressure on the Bank of England (BoE) to maintain a more accommodative monetary policy, pulling Sterling lower in the process.
Exchange Rates UK Research Our currency coverage draws on live market data, official economic releases and published bank research.
The GBP/USD pair trades with a negative bias for the second straight day, though it lacks bearish conviction and trades around the 1.3500 psychological mark during the Asian session on Monday. Moreover, spot prices hold above Friday's swing low, warranting some caution for bearish traders.
The US Dollar (USD) draws support from rising bets for an interest rate hike by the US Federal Reserve (Fed) in September amid inflation risks stemming from higher energy prices. Adding to this, escalating US-Iran confrontations in the Strait of Hormuz act as a tailwind for the safe-haven buck and weigh on the GBP/USD pair. USD bulls, however, seem hesitant and opt to wait for US inflation figures, due later this week, for more cues about the Fed's policy path.
Traders will further confront the release of the monthly UK GDP report on Friday for a fresh impetus. In the meantime, relatively thin trading volumes due to the Labor Day holiday in the US hold back traders from placing aggressive bets and might continue to lend support to the GBP/USD pair. Hence, it will be prudent to wait for strong follow-through selling before positioning for an extension of the recent pullback from a six-month peak, touched in August.
From a technical perspective, the GBP/USD pair holds above the 50-day Simple Moving Average (SMA) at 1.3460 and the 38.2% Fibonacci retracement of the June-August rise. Meanwhile, the Relative Strength Index (RSI) at 48.7 hovers around neutral, and the Moving Average Convergence Divergence (MACD) line remains slightly negative. This hints that the upside momentum is modest even as the GBP/USD pair consolidates above these underlying supports.
On the downside, initial support emerges in the 1.3470–1.3460 band defined by the 38.2% retracement and the 50-day SMA, with further cushions at the 50.0% retracement near 1.3407 and deeper Fibonacci levels at 1.3345, 1.3255 and 1.3141. On the topside, the 23.6% Fibo. retracement at 1.3548 is the first resistance to clear, ahead of the cycle high anchor around 1.3673, a break of which would reopen a stronger bullish extension.
(The technical analysis of this story was written with the help of an AI tool. Know more.)
GBP/USD daily chart
US Dollar Price Today The table below shows the percentage change of US Dollar (USD) against listed major currencies today. US Dollar was the strongest against the New Zealand Dollar.
USDEURGBPJPYCADAUDNZDCHFUSD0.03%0.05%-0.09%0.00%0.00%0.13%0.08%EUR-0.03%0.02%-0.15%-0.06%-0.03%0.08%0.05%GBP-0.05%-0.02%-0.15%-0.08%-0.04%0.07%0.03%JPY0.09%0.15%0.15%0.12%0.13%0.25%0.23%CAD-0.01%0.06%0.08%-0.12%-0.00%0.11%0.07%AUD-0.01%0.03%0.04%-0.13%0.00%0.12%0.06%NZD-0.13%-0.08%-0.07%-0.25%-0.11%-0.12%-0.04%CHF-0.08%-0.05%-0.03%-0.23%-0.07%-0.06%0.04% The heat map shows percentage changes of major currencies against each other. The base currency is picked from the left column, while the quote currency is picked from the top row. For example, if you pick the US Dollar from the left column and move along the horizontal line to the Japanese Yen, the percentage change displayed in the box will represent USD (base)/JPY (quote).
GBP/USD recovers part of its initial drop on Friday after stronger-than-expected United States (US) employment data briefly lifts the US Dollar (USD). The pair fell to an intraday low of 1.3482 immediately after the release before rebounding. At the time of writing, GBP/USD trades around 1.3512. Read More...
British Pound pulls back from session highs as BoE Bailey tames rate hike hopesThe British Pound (GBP) has retreated from session highs just below 1.3550 against the US Dollar (USD) during the London trading session, returning to levels near 1.3520 and turning negative on the daily chart. Bank of England (BoE) Governor Andrew Bailey called for flexibility on monetary policy, cooling hopes for an interest rate hike at September's monetary policy meeting. Read More...
GBP/USD Price Forecast: Bulls turn cautious as 1.3550 cap gains ahead of US NFPThe 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). Read More...
GBP/USD recovers part of its initial drop on Friday after stronger-than-expected United States (US) employment data briefly lifts the US Dollar (USD). The pair fell to an intraday low of 1.3482 immediately after the release before rebounding. At the time of writing, GBP/USD trades around 1.3512.
US Nonfarm Payrolls (NFP) increased by 162K in August, almost three times the market forecast of 56K. July’s reading was revised to a gain of 21K from the previously reported 23K decline, while the Unemployment Rate held steady at 4.1%.
The US Dollar Index (DXY), which tracks the Greenback’s value against a basket of six major currencies, trades around 99.11 after rising as high as 99.39 in response to the employment report, but holds above the more than one-week low of 98.83 touched on Thursday.
The short-lived decline in GBP/USD suggests traders are not fully convinced that the stronger employment figures will be enough to secure a Federal Reserve (Fed) rate hike this month. Recent comments from Fed officials indicate that policymakers are more focused on restoring price stability, making next week’s Consumer Price Index (CPI) and Producer Price Index (PPI) reports crucial for the September decision.
Recent inflation figures have shown some moderation. Fed Governor Christopher Waller said on Thursday that he is “finally seeing some signs of disinflation” and that the current interest-rate setting could bring inflation back to the Fed’s 2% target. However, Waller added that he would consider a September rate hike if the August inflation data comes in hot.
The strong jobs report has nevertheless pushed rate hike expectations higher. According to the CME FedWatch Tool, markets now see around a 60% chance of a 25-basis-point (bps) increase at the September 15-16 meeting, up from roughly 50% before the NFP release.
On the UK side, hawkish remarks from Bank of England (BoE) Chief Economist Huw Pill provide some support to the Pound Sterling (GBP). Pill reiterated his preference for raising the Bank Rate to 4%, although markets largely expect the BoE to leave rates unchanged at 3.75% later this month.
Fed FAQs Monetary policy in the US is shaped by the Federal Reserve (Fed). The Fed has two mandates: to achieve price stability and foster full employment. Its primary tool to achieve these goals is by adjusting interest rates. When prices are rising too quickly and inflation is above the Fed’s 2% target, it raises interest rates, increasing borrowing costs throughout the economy. This results in a stronger US Dollar (USD) as it makes the US a more attractive place for international investors to park their money. When inflation falls below 2% or the Unemployment Rate is too high, the Fed may lower interest rates to encourage borrowing, which weighs on the Greenback.
The Federal Reserve (Fed) holds eight policy meetings a year, where the Federal Open Market Committee (FOMC) assesses economic conditions and makes monetary policy decisions. The FOMC is attended by twelve Fed officials – the seven members of the Board of Governors, the president of the Federal Reserve Bank of New York, and four of the remaining eleven regional Reserve Bank presidents, who serve one-year terms on a rotating basis.
In extreme situations, the Federal Reserve may resort to a policy named Quantitative Easing (QE). QE is the process by which the Fed substantially increases the flow of credit in a stuck financial system. It is a non-standard policy measure used during crises or when inflation is extremely low. It was the Fed’s weapon of choice during the Great Financial Crisis in 2008. It involves the Fed printing more Dollars and using them to buy high grade bonds from financial institutions. QE usually weakens the US Dollar.
Quantitative tightening (QT) is the reverse process of QE, whereby the Federal Reserve stops buying bonds from financial institutions and does not reinvest the principal from the bonds it holds maturing, to purchase new bonds. It is usually positive for the value of the US Dollar.
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers. The author will not be held responsible for information that is found at the end of links posted on this page.
If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.
FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.
The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.
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.
RoboForex Ltdhttps://www.roboforex.com/
RoboForex Ltd is a reputable financial brokerage company that has been operating since 2009. It provides reliable access to the largest financial markets with competitive conditions.
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.
Related Articles
EUR/USD, USD/CAD and USD/CHF Face Key Dollar TestsUS Yields Put Bitcoin, Energy and USD/JPY at Key TestsUS Dollar Price Forecast: Fed Hike Bets Lift DXY as EUR/USD and GBP/USD Fall
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.
Trade over 50 forex markets 24 hours a day with FXOpen. Take advantage of low commissions, deep liquidity, and spreads from 0.0 pips (additional fees may apply). Open your FXOpen account now or learn more about trading forex with FXOpen.
This article represents the opinion of the Companies operating under the FXOpen brand only. It is not to be construed as an offer, solicitation, or recommendation with respect to products and services provided by the Companies operating under the FXOpen brand, nor is it to be considered financial advice.
FXOpenhttps://www.fxopen.com/
FXOpen is a global Forex and CFD Broker, founded in 2005 by a group of traders. With over 16 years of experience, the company has gained an excellent reputation a major brokerage that continues to expand rapidly. The broker offers a choice of platforms, including the popular MT4 and MT5 platforms, with a wide range of trading instruments with spreads from 0.0 pips: 600+ FX, index, share, commodity and cryptocurrency CFDs. FXOpen also provides its own PAMM technology, allowing clients to benefit from the strategies of experienced traders with a proven track record of successful trading and guarantees automatic distribution of profit and loss between the strategy provider and the strategy followers. CFDs are complex instruments and come with a high risk of losing your money. PAMM is only available in certain jurisdictions. Cryptocurrency CFDs are not available to Retail clients at FXOpen UK.
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.
Related Articles
USD/JPY Eyes Breakout as Rising Yields Support US DollarUS Dollar Price Forecast: DXY Eyes 99.58 as Jobs Week Tests Hawkish Fed; Eyes on EUR/USD and GBP/USDEUR/USD, GBP/USD, and USD/CAD Short-Term Forecast for 31/08/2026About the Author
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.
Titan FXhttp://titanfx.com
Titan FX is a technology driven online ECN forex and commodities broker that provides traders with next generation trading conditions, institutional grade spreads, fast trade execution, deep top tier liquidity and the security of financial registration and oversight.
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
