- The GBP/USD is rising some 0.33% on Monday, snapping three consecutive days of losses.
- Headwinds for the GBP/USD: a dampened market mood and higher US Treasury yields.
- GBP/USD Price Forecast: Still downward biased but could shift to neutral-downwards.
The British pound recovered some ground despite a risk-off environment in the financial markets, while the DXY reached a 20-year high around 104.187 as market players flew towards safe-haven peers. At the time of writing, the GBP/USD is trading at 1.2373.
Risk sentiment and elevated US Treasury yields boost the greenback
Global equities are trading on the backfoot while rising US Treasury yields underpin the greenback. The sentiment dampened courtesy of China’s slowest exports report in almost two years, a consequence of the Covid-19 zero-tolerance restrictions. The GBP/USD traded at a new YTD low at 1.2260 but bounced off those levels and pushed above the 1.2300 figure, towards current levels. Meanwhile, the US Dollar Index, a gauge of the buck’s value against a basket of its rivals, gains 0.49%, currently at 103.706.
Higher US Treasury yields reaffirm the market's conviction that the Fed would bring inflation to its target and have priced at least 200-bps rate hikes by 2022. Additionally, the US docket would feature Retail Sales, inflation figures, and consumer sentiment later in the week, which could shed some light on Q2 after Q1 GDP contracted to 1.4%.
Some Fed speakers added downward pressure to the major. Atlanta’s Fed President Raphael Bostic expressed that the Fed might go for two, “maybe three” half-point hikes, and then the Fed would assess the economy.
On the UK side, the Bank of England Michael Saunders, one of the three 50-bps dissenters, emphasized his preference to move relatively quickly, and some further tightening may be. However, he added that he might not vote for a half move in the next meetings.
GBP/USD Price Forecast: Technical outlook
The GBP/USD remains downward biased, but Monday’s price action might be a prelude to a lateral move before resuming the downtrend or shifting upwards. It is worth noting that the MACD’s histogram prints a positive divergence compared to lower lows in the major’s price action, which means that the GBP/USD might record another leg-up before recording lower price levels.
Upwards, the GBP/USD first resistance would be 1.2400. Break above would expose July 2020 cycle low at 1.2479, followed by the 1.2500 figure. On the other hand, the GBP/USD first support would be the 1.2300 mark. A breach of the latter would expose the YTD low at 1.2260, followed by May 2020 cycle low at 1.2075.
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 around 1.1380
The EUR/USD maintains its bearish tone on Tuesday, presently lingering around the 1.1380 zone amid the persistent buying pressure on the US Dollar. The improved sentiment in the Greenback comes amid rising US yields and mixed US data results from JOLTs and US Factory Orders.
GBP/USD treads water in the low-1.3500s
GBP/USD stays in the offered position on Tuesday and trades in the low-1.3500s, constantly following the strong rise in the Greenback. In the meanwhile, Cable's price movement is in line with Bailey's cautious tone and the mixed data from the US docket.
Gold holds on to higher ground around $3,350
Gold is falling from its multi-week high of over $3,400 achieved on Monday. It is currently losing further momentum and flirting with the $3,350 region per troy ounce on the back of a strong Greenback, higher yields and mixed US data.
Cardano Price Forecast: Sign of robust bullish reversal emerges despite dwindling DeFi TVL volume
Cardano rebounds to test resistance at $0.69 as technical indicator flashes a buy signal. A minor increase in the derivative Open Interest to $831 million suggests growing trader interest in ADA.
AUD/USD drifts lower amid cautious RBA, global trade uncertainty
AUD/USD retreats to 0.6460 as Aussie loses ground after Monday’s rally. RBA minutes reveal that the board debated a 50 bps interest rate cut but opted for a 25 bps cut to preserve predictability. Focus shifts to US JOLTS Job Openings due later in the day, Wednesday’s Australian GDP and Friday’s NFP for fresh cues.
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.