GBP/USD Forecast and News
GBP/USD meets support around 1.3300
GBP/USD retreats on Friday, surrendering part of Thursday’s strong advance and dropping to as low as the 1.3300 region. The US Dollar draws support from the softer risk tone, making it harder for Cable to hold its ground as investors digest the latest developments around the Middle East crisis.
Latest Pound Sterling News
GBP/USD Technical Overview
The technical analysis of the daily chart indicates a reinforcement of a bearish bias, as the pair pulled back from the upper boundary of the descending channel pattern. Moreover, 14-day Relative Strength Index (RSI) hovers just below the 40 mark, confirming persistent downside pressure rather than oversold conditions and keeping the focus on the recent sequence of lower daily highs.
The GBP/USD pair may explore the region downwards in terms of finding the primary support at the three-month low of 1.3253, which was recorded on December 3. Further declines would put downward pressure on the GBP/USD pair to navigate the region around the descending channel’s lower boundary around 1.3140, followed by the 11-month low at 1.3010.
On the upside, the immediate barrier lies at the nine-day EMA at 1.3414, aligned with the upper descending channel boundary. Further advances above the channel would cause the emergence of the bullish bias and support the GBP/USD pair to test the 50-day EMA at 1.3482. The improved medium-term price momentum may lead the GBP/USD pair to navigate the region around 1.3869, the highest since September 2021, reached on January 27.
Fundamental Overview
The GBP/USD pair attracts buyers for the third consecutive day and climbs to over a one-week high, around the 1.3485 region, during the first half of the European session on Tuesday. The move up is backed by a combination of supporting factors, which backs the case for an extension of the recent bounce from the vicinity of mid-1.3200s, or a three-month trough, touched last week.
US President Donald Trump said on Monday that the US-Israel campaign in Iran may soon come to a conclusion and would be over very soon, boosting investors' confidence and triggering a goodish recovery in the global risk sentiment. This is evident from a positive tone around the equity markets and undermines demand for the safe-haven US Dollar (USD). Furthermore, the latest development led to an overnight dramatic turnaround in Crude Oil prices, which provides some respite from a potential war-driven surge in inflation. This likely reduces the chances of a hawkish shift from the US Federal Reserve (Fed) and weighs on US Treasury bond yields, dragging the USD further away from a three-month top set on Monday and lending some support to the GBP/USD pair.
The British Pound's (GBP) relative outperformance could also be tied to the Bank of England (BoE) interest rate repricing. Two weeks ago, traders were pricing in approximately three BoE rate cuts for 2026. As of Monday, those expectations were replaced with a roughly 70% probability of a rate hike by year-end. This marks a swing of 100 basis points (bps) in expected BoE policy direction within two weeks, which turns out to be another factor acting as a tailwind for the GBP/USD pair. That said, hopes that the British government could introduce packages to support households in the face of a new energy cost shock – as hinted by Prime Minister Keir Starmer – raise the odds of a destabilising bond market and might cap the GBP. This warrants some caution for aggressive bullish traders.
In fact, Starmer said that Chancellor Rachel Reeves was in touch with the BoE, which is the clearest sign that the government is worried that measures could trigger unforeseen market reactions. Moreover, Iran’s Islamic Revolutionary Guard Corps (IRGC) dismissed Trump’s remarks as nonsense and said that Tehran, not Washington, will determine when the war ends. Adding to this, Iranian officials warned that regional security would either exist for everyone or for no one. This keeps geopolitical risks in play, which could limit deeper losses for the safe-haven Greenback and contribute to capping the GBP/USD pair. Hence, the focus remains squarely on developments surrounding the US-Israel-Iran war as traders look to this week's macro data from the US and the UK for short-term opportunities.
SPECIAL WEEKLY GBP/USD FORECAST
Interested in weekly GBP/USD forecasts? Our experts make weekly updates forecasting the next possible moves of the Pound-Dollar pair. Here you can find the most recent forecast by our market experts:
GBP/USD: Pound Sterling tests 200-day SMA on the road to recovery Premium
The Pound Sterling (GBP) staged a late rebound from near three-month lows against the US Dollar (USD), testing the critical 1.3440 supply zone.
Latest GBP Analysis
Editors' picks
EUR/USD: War continues to steal the limelight, and not for good Premium
The EUR/USD pair bounced back in the last few days, settling for the week around 1.1530. The Iran war and central banks’ monetary policy announcements took centre stage, yet none was enough to impress speculative interest.
Gold: Major central banks’ hawkish tone weighs heavily Premium
Gold (XAU/USD) extended its slide into a third consecutive week and lost more than 6%, its worst weekly performance since March 2020, as major central banks adopted a hawkish tone because of the upside risks to inflation posed by rising energy prices.
GBP/USD: Pound Sterling tests 200-day SMA on the road to recovery Premium
The Pound Sterling (GBP) staged a late rebound from near three-month lows against the US Dollar (USD), testing the critical 1.3440 supply zone.
Bitcoin: The Fed kills the vibe
US Dollar: The Dollar stumbles, but the macro story hasn’t changed Premium
The US Dollar just reminded markets that trends are rarely linear.
Majors
Cryptocurrencies
Signatures
Influential Institutions & People for the GBP/USD
The Pound VS Dollar can be seriously affected by news or the decisions taken by two main central banks:
The Bank of England (BoE)
Founded in 1694, the Bank of England (BoE) is the central bank of the United Kingdom (UK). Known as ‘The old lady of Threadneedle Street’, the bank’s mission is "to promote the good of the people of the United Kingdom by maintaining monetary and financial stability".
The Bank of England is responsible for maintaining the UK’s economic stability. It operates monetary policy by adjusting the Bank Rate and, in certain circumstances, supplements this with measures such as quantitative easing.
The Bank of England decides monetary policy for the United Kingdom. Its primary goal is to achieve a steady inflation rate of 2%. Its tool for achieving this is via the adjustment of base lending rates. The BoE sets the rate at which it lends to commercial banks and banks lend to each other, determining the level of interest rates in the economy overall. This also impacts the value of the Pound Sterling (GBP).
The official website, on X and YouTube
The Federal Reserve (Fed)
The Federal Reserve (Fed) is the central bank of the United States (US) and it has two main targets: to maintain the unemployment rate at its lowest possible levels and to keep inflation around 2%. The Federal Reserve System's structure is composed of the presidentially appointed Board of Governors and the partially appointed Federal Open Market Committee (FOMC). The FOMC organizes eight scheduled meetings in a year to review economic and financial conditions. It also determines the appropriate stance of monetary policy and assesses the risks to its long-run goals of price stability and sustainable economic growth. The FOMC Minutes, which are released by the Board of Governors of the Federal Reserve weeks after the latest meeting, are a guide to the future US interest-rate policy.
Fed official website, on X and Facebook
Andrew Bailey
Andrew Bailey has been the Governor of the BoE since March 2020 and his appointment ends on March 2028. Previously, he served in the BoJ as its Chief Cashier, Deputy Governor for Prudential Regulation and Chief Executive of the Financial Conduct Authority.
Bailey on BoE's profile and Wikipedia
Jerome Powell
Jerome Powell took office as chairman of the Board of Governors of the Federal Reserve System in February 2018, for a four-year term ending in February 2022. He was sworn in on May 23, 2022, for a second term as Chairman ending May 15, 2026. Born in Washington D.C., he received a bachelor’s degree in politics from Princeton University in 1975 and earned a law degree from Georgetown University in 1979. Powell served as an assistant secretary and as undersecretary of the Treasury under President George H.W. Bush. He also worked as a lawyer and investment banker in New York City. From 1997 through 2005, Powell was a partner at The Carlyle Group.
Jerome Powell Fed's Profile and Wikipedia
BOE NEWS & ANALYSIS
FED NEWS & ANALYSIS
About GBP/USD
The GBP/USD (or Pound Dollar) currency pair belongs to the group of 'Majors', referring to the most important and widely traded pairs in the world. The pair is also known as “the Cable”, a term originating in the mid-19th century that refers to the first transatlantic telegraph connecting Great Britain and the United States.
As a closely watched and widely traded currency pair, it features the British Pound as the base currency and the US Dollar as the counter currency. For that reason, macroeconomic data from both the United States and the United Kingdom significantly impacts its price. One notable event that affected the volatility of the pair was Brexit.
Related pairs
EUR/USD
The EUR/USD is one of the most widely traded currency pairs in the Forex market, where the Euro serves as the base currency and the US Dollar as the counter currency. It accounts for more than half of the total trading volume in the Forex market, making gaps almost inexistent, let alone sudden reversals caused by breakaway gaps.
The EUR/USD is usually quiet during the Asian session, as economic data influencing the pair is usually released during the European or US sessions. Activity increases as European traders begin their day, leading to heightened trading volume. This activity slows around midday during the European lunch break but picks up again when US markets come online.
USD/JPY
The USD/JPY (US Dollar Japanese Yen) currency pair is one of the 'Majors', a group of the most important currency pairs in the world. The Japanese Yen, known for its low interest rate, is frequently used in carry trades, making it one of the most traded currencies worldwide. In the USD/JPY pair, the US Dollar is the base currency and the Japanese Yen serves as the counter currency.
Trading USD/JPY is also known as trading the "ninja" or the "gopher", although the latter nickname is more frequently associated with the GBP/JPY pair. USD/JPY usually has a positive correlation with other pairs like USD/CHF and USD/CAD, as all three use the US Dollar as the base currency. The value of the pair is often influenced by interest-rate differentials between the two central banks: the Federal Reserve (Fed) and the Bank of Japan (BoJ).