GBP/USD Price Forecast: Advancing 20-day EMA supports upside towards 1.3700
- GBP/USD rises to near 1.3615 as the US Dollar is under pressure amid the US-Iran optimism.
- Investors await the US NFP data for fresh cues on the Fed’s monetary policy outlook.
- The Fed is expected to maintain the status quo for the entire year.
The GBP/USD pair trades 0.18% higher around 1.3620 during the European trading session on Thursday. The Cable reflects strength as the US Dollar (USD) faces selling pressure amid the optimism that the United States (US) and Iran will reach a peace deal soon.
US Dollar Price Today
The table below shows the percentage change of US Dollar (USD) against listed major currencies today. US Dollar was the weakest against the New Zealand Dollar.
| USD | EUR | GBP | JPY | CAD | AUD | NZD | CHF | |
|---|---|---|---|---|---|---|---|---|
| USD | -0.16% | -0.17% | -0.02% | -0.03% | -0.28% | -0.45% | -0.11% | |
| EUR | 0.16% | -0.02% | 0.17% | 0.14% | -0.12% | -0.29% | 0.04% | |
| GBP | 0.17% | 0.02% | 0.17% | 0.14% | -0.11% | -0.28% | 0.06% | |
| JPY | 0.02% | -0.17% | -0.17% | -0.03% | -0.27% | -0.49% | -0.09% | |
| CAD | 0.03% | -0.14% | -0.14% | 0.03% | -0.24% | -0.42% | -0.08% | |
| AUD | 0.28% | 0.12% | 0.11% | 0.27% | 0.24% | -0.17% | 0.16% | |
| NZD | 0.45% | 0.29% | 0.28% | 0.49% | 0.42% | 0.17% | 0.34% | |
| CHF | 0.11% | -0.04% | -0.06% | 0.09% | 0.08% | -0.16% | -0.34% |
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).
As of writing, the US Dollar Index (DXY), which tracks the Greenback’s value against six major currencies, is down 0.1% to near 97.90.
Market sentiment is risk-on, following reports from Al-Hadath, sister channel to Al Arabiya, that intense communications between the US and Iran are ongoing to gradually reopen the Strait of Hormuz, a vital passage to almost 20% of global energy supply. S&P 500 futures are marginally higher at around 7,7370, indicating a higher appetite for riskier assets.
Going forward, the major trigger for Cable will be the US Nonfarm Payrolls (NFP) data for April, which will be released on Friday. The data is expected to influence market expectations for the Federal Reserve’s (Fed) monetary policy outlook. The CME FedWatch tool shows that the central bank will hold interest rates at their current levels by the year-end.
GBP/USD technical analysis
GBP/USD trades higher at around 1.3620 as of writing. The pair retains a constructive bullish bias as spot holds above the 20-period exponential moving average (EMA) at 1.3518. The pair is also trading just over the 61.8% retracement at 1.3600, turning that level into immediate underlying demand, while the Relative Strength Index (14) at 61.4 sits in positive territory, suggesting sustained upward momentum rather than overbought excess.
On the downside, initial support is seen at the recent pivot area around 1.3600, with the 20-period EMA and the 50% Fibonacci retracement clustered near 1.3520, reinforcing a deeper floor ahead of 1.3434 and 1.3331. On the topside, further gains face first resistance at the 78.6% Fibonacci retracement near 1.3719, with a break there exposing the cycle high region at 1.3870 as the next resistance hurdle.
(The technical analysis of this story was written with the help of an AI tool.)
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.
Recommended Articles
