GBPUSD Forecast and News


GBP/USD tests 1.2200 as risk-off flows dominate

GBP/USD is trading deep in red near 1.2200, as investors turn away from higher-yielding assets such as the GBP. Despite falling US Treasury bond yields, the dollar manages to gather strength amid risk aversion. US Pelosi's visit to Taiwan is the main event risk this Tuesday. 

Latest GBP News


Technical Overview

GBP/USD bulls struggle to keep reins around the monthly top during early Tuesday morning in Europe. Even so, the pair buyers remain hopeful amid the bullish MACD signals and a clear upside break of the descending trend line from February, as well as the 50-DMA.

It’s worth noting that the pair’s declines below the 50-DMA and the resistance-turned-support line, respectively around 1.2200 and 1.2140, need validation from a fortnight-long support line, close to 1.2090 by the press time, to convince GBP/USD bears.

Following that, a downward trajectory towards June’s low of 1.1933 and the recent multi-month bottom surrounding 1.1760 can’t be ruled out. On the contrary, the GBP/USD pair’s further upside could aim for the mid-June swing high near 1.2410.

However, the 38.2% Fibonacci retracement level of February-July downside and the 100-DMA, around 1.2485 and 1.2510 in that order, will challenge the pair buyers before directing them to the May month high of 1.2669.


Fundamental Overview

The US Dollar Index (DXY) drops to the fresh low in a month as bears approach the 105.00 mark at the latest.

On the other hand, one-month risk reversal (RR) of the GBP/USD prices, a spread between the call options and put options, dropped for the third consecutive day to -0.030 at the latest by the end of Monday’s North American session, per Reuters data.



SPECIAL WEEKLY GBPUSD FORECAST

Interested in weekly GBPUSD 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: Bulls on the lookout for 1.2500 ahead of BOE, NFP Premium

GBP/USD: Bulls on the lookout for 1.2500 ahead of BOE, NFP

GBP/USD booked second straight weekly advance as the Fed disappointed. US recession fears loom ahead of NFP while BOE is set for a 50 bps rate hike. Daily technical setup favors bulls, with a test of 1.2500 likely on the cards.  

Read full analysis

Big Picture

GBPUSD Bullish Themes

GBPUSD BEARISh Themes

Sponsor broker


FXS Signals

Latest GBP Analysis


Latest GBP Analysis

Editors' picks

EUR/USD turns south towards 1.0200 amid risk-aversion

EUR/USD turns south towards 1.0200 amid risk-aversion

EUR/USD is heading south towards 1.0200 in early Europe, as bulls failed to keep reins near the monthly high. Mounting US-China tensions over Taiwan and recession fears weigh on risk sentiment and help the dollar find demand as a safe haven.

EUR/USD News

GBP/USD tests 1.2200 as risk-off flows dominate

GBP/USD tests 1.2200 as risk-off flows dominate

GBP/USD is trading deep in red near 1.2200, as investors turn away from higher-yielding assets such as the GBP. Despite falling US Treasury bond yields, the dollar manages to gather strength amid risk aversion. US Pelosi's visit to Taiwan is the main event risk this Tuesday. 

GBP/USD News

USD/JPY finds support near 130.40 on Japanese jaw-boning

USD/JPY finds support near 130.40 on Japanese jaw-boning

USD/JPY is rebounding towards 131.00, having found support near 130.40 after the Japanese Finance Minister expressed concerns about the rapid moves in the yen. Risk-aversion combined with the sell-off in the US dollar and yields keep the downside intact in the pair. 

USD/JPY News

Gold bulls keep their sight on $1,786 amid Taiwan tensions

Gold bulls keep their sight on $1,786 amid Taiwan tensions

Gold price eases but upside remains favored amid escalating US-China tensions. The expected visit of US’ Pelosi to Taipei rattles markets amid China warnings. Gold bulls remain on track to test the critical resistance area at $1,786.

Gold News

WTI: Sellers in the driving seat around $93.00

WTI: Sellers in the driving seat around $93.00

WTI crude oil prices remain depressed after breaking the one-month-old symmetrical triangle to the south. That said, the black gold holds lower ground near $93.00, the lowest levels in two weeks, during Tuesday’s Asian session. Given the bearish MACD signals joining the triangle’s breakdown, the commodity prices are likely to decline further.

Oil News

Majors

Cryptocurrencies

Signatures


GBPUSD YEARLY FORECAST

How could GBPUSD move this year? Our experts make a GBPUSD update forecasting the possible moves of the pound-dollar pair during the whole year. Don't miss our 2022 GBPUSD forecast!

2022 GBPUSD FORECAST

In the GBPUSD Price Forecast 2022, our dedicated contributors expect a continuation of the bullish trend during the year. By the end of 2021, the average price for the pair is 1.3368. Read more details about the forecast.

From Jan 2021 to Dec 2021, the maximum level for the GBPUSD (Pound US Dollar) was 1.4213 (on 31/05/21), and the minimum, 1.3205 (on 8/12/21).

MOST INFLUENTIAL POLITICAL EVENTS IN 2022 FOR GBPUSD

Number one political event in 2022 for the pound to US dollar pair is still being Brexit. BoE's fiscal policy and covid will be key too. These clouds are set to clear at various paces, making way for rapid changes and new challenges. Although 2021 was still dedicated to minor Brexit issues and fighting covid, 2022 could be when the UK goes its own way. Losing “equivalence” would make the country less attractive to investments while maintaining the current status could cause trouble within the ruling Conservative Party. Investors prefer equivalence, but any doubts about it could weigh on sterling.


Influential Institutions & People for the GBPUSD

The Pound VS Dollar can be seriously affected by news or the decisions taken by two main central banks:

The Bank of England (BoE)

The Bank of England is the central bank of the United Kingdom. Established in 1694 and privately owned in the beginning, the Bank was nationalised in 1946 so now is completely owned by the UK government. BOE's main reason to be is to maintain monetary and financial stability in the country. Some of its other tasks are producing secure bank notes, operating asset purchase facility and keeping the inflation low and stable. The bank is overseen by the Court, named used to reffer the board of directors, and is accountable to Parliament and the public.

The Federal Reserve Bank (Fed)

On the other hand we found The Federal Reserve System (Fed) wich is the central banking system of the United States. Fed has two main targets: to keep unemployment rate to their lowest possible levels and inflation around 2%. The Federal Reserve System's structure is composed of the presidentially appointed Board of Governors, partially presidentially appointed Federal Open Market Committee (FOMC). The FOMC organizes 8 meetings in a year and reviews economic and financial conditions. Also determines the appropriate stance of monetary policy and assesses the risks to its long-run goals of price stability and sustainable economic growth.


Andrew Bailey

Andrew Bailey is Governor of the Bank of England since 16 March 2020. He was announced as the new Governor of the BoE on 20 December 2019. Bailey was born in Leicester in 1959 and graduated from Queens' College with a BA in History and a PhD from the Faculty of History, University of Cambridge in 1985. Before becoming the Governor of the BOE, Andrew worked at the Bank in a number of areas, most recently as Executive Director for Banking Services and Chief Cashier, as well as Head of the Bank's Special Resolution Unit (SRU). Previous roles include Governor's Private Secretary, and Head of the International Economic Analysis Division in Monetary Analysis.

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. His term as a member of the Board of Governors will expire January 31, 2028. 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.

BOE NEWS & ANALYSIS

ECB NEWS & ANALYSIS


About GBPUSD

The GBPUSD (or Pound Dollar) currency pair belongs to the group of 'Majors', a way to mention the most important pairs in the world. The pair is also called 'The Cable', referring to the first Transatlantic cable that was crossing the Atlantic Ocean in order to connect Great Britain with the United States of America. This term originated in the mid-19th century, which makes it one of the oldest currency pairs.

Pound Dollar represents two economies: British and American (from United States of America). The Cable is a closely watched and widely traded currency pair where the Pound is the base currency and the US Dollar is the counter currency. For that reason, all the macroeconomic data related to the US and the UK affects the price of this pair. One of the events which affected most the volatility of the pound vs. dollar was Brexit.

Related pairs

EUR/USD

The EUR/USD (or Euro Dollar) currency pair belongs to the group of 'Majors', a way to mention the most important pairs in the world. This group also includes the following currency pairs: GBP/USD, USD/JPY, AUD/USD, USD/CHF, NZD/USD and USD/CAD. The popularity of Euro Dollar is due to the fact that it gathers two main economies: the European and American (from United States of America) ones. This is a widely traded currency pair where the Euro is the base currency and the US Dollar is the counter currency. Since the EUR/USD pair consists of more than half of all the trading volume worldwide in the Forex Market, it is almost impossible for a gap to appear, let alone a consequent breakaway gap in the opposite direction.

Normally, the EUR/USD is very quiet during the Asian session because economic data that affects the fundamentals of those currencies is released in either the European or U.S. session. Once traders in Europe get to their desks a flurry of activity hits the tape as they start filling customer orders and jockey for positions. At noon activity slows down as traders step out for lunch and then picks back up again as the U.S. comes online.

USD/JPY

The USD/JPY (or US Dollar Japanese Yen) currency pair belongs to the group of 'Majors', a way to mention the most important pairs in the world. This group also includes the following currency pairs: EUR/USD, GBP/USD, AUD/USD, USD/CHF, NZD/USD and USD/CAD. Japanese Yen has a low interest rate and is normally used in carry trades. This is the reason why is one of the most trades currencies worldwide. In the USD/JPY the US Dollar is the base currency and the Japanese Yen is the counter currency. The pair represents American (from United States of America) and Japanese economies.

Trading the USD/JPY currency pair is also known as trading the "ninja" or the "gopher", although this last name is more frequently used when referred to the GBP/JPY currency pair. The US Dollar Japanese Yen usually has a positive correlation with the following two pairs: USD/CHF and USD/CAD. The nature of this correlation is due to the fact that both currency pairs also use the US Dollar as the base currency, such as USD/JPY. The value of the pair tends to be affected when the two main central banks of each country, the Bank of Japan (BoJ) and the Federal Reserve Bank (Fed), face serious interest rate differential.