- GBP/USD trades near 1.2600 in the European session on Tuesday.
- Labor market data from the UK supports Pound Sterling.
- The pair's technical picture suggests that the bullish bias remains intact.
GBP/USD fluctuates in a narrow channel slightly above 1.2600 after closing modestly higher on Monday. The pair's technical outlook shows that the bullish bias remains unchanged in the near term.
British Pound PRICE This week
The table below shows the percentage change of British Pound (GBP) against listed major currencies this week. British Pound was the strongest against the Euro.
| USD | EUR | GBP | JPY | CAD | AUD | NZD | CHF | |
|---|---|---|---|---|---|---|---|---|
| USD | 0.28% | -0.11% | -0.30% | 0.06% | -0.17% | 0.17% | 0.13% | |
| EUR | -0.28% | -0.24% | -0.62% | -0.12% | -0.37% | -0.01% | -0.04% | |
| GBP | 0.11% | 0.24% | -0.31% | 0.12% | -0.07% | 0.23% | 0.21% | |
| JPY | 0.30% | 0.62% | 0.31% | 0.36% | 0.16% | 0.69% | 0.43% | |
| CAD | -0.06% | 0.12% | -0.12% | -0.36% | -0.22% | 0.11% | 0.09% | |
| AUD | 0.17% | 0.37% | 0.07% | -0.16% | 0.22% | 0.36% | 0.34% | |
| NZD | -0.17% | 0.00% | -0.23% | -0.69% | -0.11% | -0.36% | -0.03% | |
| CHF | -0.13% | 0.04% | -0.21% | -0.43% | -0.09% | -0.34% | 0.03% |
The heat map shows percentage changes of major currencies against each other. The base currency is picked from the left column, while the quote currency is picked from the top row. For example, if you pick the British Pound from the left column and move along the horizontal line to the US Dollar, the percentage change displayed in the box will represent GBP (base)/USD (quote).
The UK's Office for National Statistics (ONS) reported early Tuesday that the ILO Unemployment Rate held steady at 4.4% in the three months to December. This reading came in better than the market forecast of 4.5%. Additionally, the Employment Change rose by 107,000 in this period, up sharply from 35,000 reported for the previous month. Finally, the annual wage inflation, as measured by the change in the Average Earnings Including Bonus, climbed to 6% from 5.6%. These figures seem to be helping Pound Sterling stay resilient against the US Dollar (USD).
In the meantime, while participating in a panel discussion titled "Preserving and enhancing open financial markets" at an event in Brussels on Tuesday, Bank of England (BoE) Governor Andrew Bailey acknowledged that they are in a period of heightened uncertainty and added that they are facing a weak growth environment in the UK.
The economic calendar will not feature any high-impact data releases on Tuesday. In case risk flows dominate the action in the financial markets in the second half of the day, GBP/USD could regain its traction. At the time of press, US stock index futures were up between 0.1% and 0.3%.
GBP/USD Technical Analysis
The Relative Strength Index (RSI) indicator on the 4-hour chart holds above 60 and GBP/USD continues to trade above the 20-period Simple Moving Average, reflecting sellers' hesitancy.
In case GBP/USD continues to use 1.2600 (round level) as support, it could face the next resistance at 1.2650 (Fibonacci 78.6% retracement of the latest downtrend) before 1.2700-1.2710 (round level, static level). On the downside, supports could be seen at 1.2530 (Fibonacci 61.8% retracement), 1.2500 (round level, static level) and 1.2460-1.2450 (100-period Simple Moving Average, Fibonacci 50% retracement).
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.
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.
Recommended Content
Editors’ Picks
EUR/USD remains offered and challenges 1.0800
The intense recovery in the US Dollar keeps the price action in the risk complex depressed, forcing EUR/USD to recede further and put the key support at 1.0800 to the test on Friday.
GBP/USD breaks below 1.2900 on stronger Dollar
Persistent buying pressure on the Greenback has pushed GBP/USD to multi-day lows below the 1.2900 level, as investors continue to digest the recent interest rate decisions from both the Fed and the BoE.
Gold meets support around the $3,000 mark
The combined impact of a stronger US Dollar, continued profit taking, and the effects of Quadruple Witching weighed on Gold, pulling its troy ounce price down to around the pivotal $3,000 level on Friday.
US SEC Crypto Task Force to host the first-ever roundtable on crypto asset regulation
The US Securities and Exchange Commission (SEC) Crypto Task Force will host a series of roundtables to discuss key areas of interest in regulating crypto assets. The “Spring Sprint Toward Crypto Clarity” series’ first-ever roundtable begins on Friday.
Week ahead – Flash PMIs, US and UK inflation eyed as tariff war rumbles on
US PCE inflation up next, but will consumption data matter more? UK budget and CPI in focus after hawkish BoE decision. Euro turns to flash PMIs for bounce as rally runs out of steam. Inflation numbers out of Tokyo and Australia also on the agenda.
The Best brokers to trade EUR/USD
SPONSORED Discover the top brokers for trading EUR/USD in 2025. Our list features brokers with competitive spreads, fast execution, and powerful platforms. Whether you're a beginner or an expert, find the right partner to navigate the dynamic Forex market.