- GBP/USD corrects lower after setting a new 29-month high on Tuesday.
- The pair could extend its correction if 1.3200 support fails.
- The economic calendar will not offer any high-tier data releases on Wednesday.
GBP/USD stays under modest bearish pressure and declines toward 1.3200 after touching its highest level since March 2022 above 1.3260 on Tuesday. In the absence of high-impact macroeconomic data releases and fundamental developments, investors could pay close attention to the pair's technical conditions.
British Pound PRICE Today
The table below shows the percentage change of British Pound (GBP) against listed major currencies today. British Pound was the weakest against the US Dollar.
| USD | EUR | GBP | JPY | CAD | AUD | NZD | CHF | |
|---|---|---|---|---|---|---|---|---|
| USD | 0.49% | 0.31% | 0.32% | 0.15% | 0.05% | -0.11% | 0.18% | |
| EUR | -0.49% | -0.17% | -0.18% | -0.34% | -0.43% | -0.33% | -0.31% | |
| GBP | -0.31% | 0.17% | 0.00% | -0.17% | -0.26% | -0.15% | -0.13% | |
| JPY | -0.32% | 0.18% | 0.00% | -0.14% | -0.26% | -0.18% | -0.13% | |
| CAD | -0.15% | 0.34% | 0.17% | 0.14% | -0.10% | 0.01% | 0.03% | |
| AUD | -0.05% | 0.43% | 0.26% | 0.26% | 0.10% | 0.11% | 0.13% | |
| NZD | 0.11% | 0.33% | 0.15% | 0.18% | -0.01% | -0.11% | 0.02% | |
| CHF | -0.18% | 0.31% | 0.13% | 0.13% | -0.03% | -0.13% | -0.02% |
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).
Following a quiet European session on Tuesday, GBP/USD gained traction in the second half of the day and closed in positive territory, supported by the improving risk mood. US stock index futures trade flat during the European trading hours on Wednesday, failing to provide a clue regarding the risk mood.
On Thursday, the US Bureau of Economic Analysis will release its second estimate of the annualized Gross Domestic Product (GDP) growth for the second quarter, which is forecast to match the initial estimate of 2.8%. Weekly Initial Jobless Claims data will also be featured in the US economic docket ahead of Friday's key inflation data, the Personal Consumption Expenditures (PCE) Price Index.
GBP/USD Technical Analysis
The Relative Strength Index (RSI) indicator on the 4-hour chart declined below 70 for the first time in over 10 days, suggesting that the pair is finally staging an overdue technical correction.
On the downside, the lower limit of the ascending channel aligns as immediate support at 1.3200. If this level fails, technical sellers could take action and open the door for an extended correction toward 1.3140 (static level) and 1.3100 (100-period Simple Moving Average (SMA), static level).
On the upside, 1.3250 (mid-point of the ascending channel) could be seen as first technical resistance before 1.3300 (static level, upper limit of the ascending channel).
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, aka ‘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.
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