Get started

Poundsterling

GBP/USD: The Pound Rebounds Back Above 1.33000During the last trading session, the GBP/USD pair posted a gain of more than 0.5% in favor of the pound, as U.S. dollar weakness continues, even after some positive remarks regarding the U.S.–China trade war. For now, it seems that investors are viewing European currencies as a potential safe haven amid the current wave of economic uncertainty across markets. This shift in sentiment has helped to sustain consistent bullish pressure on the pound in the short term. Broad Ascending Channel Since mid-January, the pair has been forming a strong ascending channel, with price now trading above the 200-period simple moving average, reinforcing long-term bullish momentum. So far, no bearish correction has been strong enough to break the channel, which remains the most relevant technical formation to monitor for upcoming GBP/USD moves. RSI Despite strong bullish momentum, a notable divergence has begun to form on the RSI, as the pair continues to post higher highs in price, while the RSI shows flat peaks in the short term. In addition, the RSI line is hovering near the 70 level, which marks the overbought zone. Both signals suggest a potential imbalance in market forces, possibly opening the door to short-term bearish corrections. Key Levels: 1.33763 – Key Resistance: This level represents the most recent highs reached by GBP/USD. A sustained move above this area could confirm strong bullish momentum and lead to an acceleration within the current channel. 1.30448 – Near Support: This area corresponds to a consolidation zone seen over the past few months. It may serve as a tentative barrier where short-term pullbacks could occur. 1.28248 – Major Support: This is a critical level, aligned with the 200-period simple moving average. A decisive move below this support could invalidate the current bullish formation and potentially trigger a long-term bearish shift. Written by Julian Pineda, CFA – Market Analyst
by FOREXcom
1
GBPUSD - Will the dollar go up?!The GBPUSD pair is above the EMA200 and EMA50 on the 4-hour timeframe and is moving in its ascending channel. If the pair corrects down towards the demand zone, it can be bought in the direction of its rise. According to the latest Reuters survey of economists, U.S.-imposed trade tariffs have had a significant negative impact on the business environment in the United Kingdom. The assessment suggests that global trade tensions, combined with America’s protectionist policies, have undermined the confidence of British companies and investors in the country’s economic outlook. Market pricing reflects expectations that the Bank of England will cut interest rates by 0.84% over the course of this year. The survey indicates that the UK’s GDP growth for 2025 is expected to average 0.9%, down from the previous estimate of 1%. Growth for 2026 is now projected at 1.2%, also lower than the 1.4% forecast made in March. In terms of monetary policy, there is a strong consensus among economists that the Bank of England is on a gradual path toward easing interest rates. Projections suggest that the base rate will decline by 25 basis points each quarter throughout 2025, reaching 3.75% by year-end. Notably, all 67 economists participating in the poll expect the Bank of England to cut rates by 25 basis points at its May 8 meeting, bringing the rate down to 4.25%. Meanwhile, the U.S.Federal Reserve, in its latest Beige Book release, reported that economic activity across the country has shown “little change.” The report detailed that only five districts experienced “modest growth,” three noted activity was “about flat,” and four reported “slight to moderate declines.” The Fed stated, “The outlook in several districts deteriorated notably due to heightened economic uncertainty, particularly stemming from tariffs.” On employment, most districts experienced “little to slight” increases. One district noted a “modest increase,” four reported “slight gains,” another four observed no change, and three recorded “slight declines” in employment levels. At the same time, prices continued to rise across the country. Six districts described price growth as “modest,” while the other six reported it as “moderate.” The Fed explained that most districts expected input costs to rise further due to tariffs. UBS has issued a warning that Donald Trump’s calls for rate cuts may erode confidence in the Federal Reserve’s independence and fuel greater uncertainty in financial markets. UBS analysts believe that reduced investment and consumption in the U.S. economy are primarily driven by increased economic uncertainty, rather than restrictive monetary policy. They emphasize that markets are highly sensitive to any perceived threats against the Fed’s autonomy, and in the current climate, it is this economic volatility—more than interest rate levels—that is harming the economy.
Long
by Ali_PSND
GBP/USD Maintains a Consistent Upward ChannelThe bearish bias seen in previous sessions appears to have paused temporarily, giving way to a notable bullish momentum, which has driven gains of over 1% in the short term in favor of the British pound. Today’s White House announcement to temporarily pause tariffs on several previously threatened countries—excluding China, which could face tariffs of up to 125%—has weakened the U.S. dollar in the short term. This shift has allowed the British pound to regain ground, supporting a steady bullish bias in the GBP/USD pair. Upward Channel Since January 14 of this year, bullish strength has been dominant, forming a clear ascending channel that has repeatedly pushed the price above the 200-period moving average. Recent bearish swings have failed to break through the ascending trendline, which remains intact, making this bullish channel the most important formation to monitor for now. TRIX Despite recent declines in the TRIX line, the indicator continues to oscillate above the zero level. This suggests that buying momentum remains intact when averaging recent moving periods. As long as the TRIX line continues to hold above the neutral level, bullish strength may become increasingly consistent in the short term. RSI The RSI line is approaching the 50 level, which marks the neutral zone on the indicator. However, if a significant breakout above this level occurs, bullish impulses could become dominant in the market—potentially strengthening upward pressure on GBP/USD. Key Levels: 1.29275 – Near Resistance: This level represents the recent weekly high. Bullish moves above this level could reinforce the short-term buying bias and lead to more sustained upward momentum. 1.27772 – Near Barrier: This level aligns with the 200-period moving average. Continued price action around this zone may lead to neutral consolidation and the formation of a short-term sideways range. 1.26183 – Final Support: This level corresponds to late February lows. A confirmed break below this support could signal the end of the current bullish channel. By Julian Pineda, CFA – Market Analyst
by FOREXcom
GBP/USD LONGHi ! Based on the current price action and I have prepared 2 trades for next week. First is a long position from 1.287 where is VAL , price has respected this area, making it a good level for initiating a smaller long position with limited risk. Forward I am looking at 1.3 area and looking to scaling in after confirmation above 1.302 ensures that I participate in the trend continuation without overexposing prematurely. Step 1: Small Entry at 1.287 Entry: Long position at 1.287. Stop Loss: Below 1.2800. Take Profit: Partial profit near resistance at 1.3000, or hold until breakout confirmation. Step 2: Scale In After Breakout Entry Trigger: Wait for price action to break and hold above 1.302 (confirmed by strong candlestick close or volume spike). Entry Price: Enter larger position at 1.302. Stop Loss: Below recent breakout level (~1.295). Take Profit Levels: First Target: 1.3200. Second Target: 1.3400. FX:GBPUSD
Long
by Andrei_C
GBP/USD Analysis: Pair Fails to Hold Above Psychological LevelGBP/USD Analysis: Pair Fails to Hold Above Psychological Level As shown in today’s GBP/USD chart, the pair failed to maintain its position above the psychological level of 1.3000 USD per pound, where it had reached its highest point since early 2025. The decline followed recent central bank decisions and statements, with both the Bank of England and the Federal Reserve keeping interest rates unchanged. On one side, the Bank of England: → Warned of inflation risks, partly driven by external factors such as US trade tariffs. → Indicated a potential rate cut in the coming months. On the other hand, the US dollar strengthened on Thursday after the Federal Reserve signalled reluctance to rush further rate cuts this year, despite uncertainties surrounding US tariffs. These statements highlighted the challenges market participants face in assessing the risks posed by tariffs on global trade. Technical Analysis of GBP/USD In March, the pound followed an upward trend against the US dollar, forming an ascending channel (marked in blue). However, once the price moved above the key 1.3000 level, the upper boundary of the channel appeared out of reach—possibly signalling weakening buying momentum. As a result, the price broke below the lower boundary of the channel, which has now shown signs of resistance (indicated by an arrow). If bearish pressure persists, the price could fall towards the dotted trendline below the channel, at a distance equal to its height. Additionally, a test of the previous local low around 1.2911 cannot be ruled out. This article represents the opinion of the Companies operating under the FXOpen brand only. It is not to be construed as an offer, solicitation, or recommendation with respect to products and services provided by the Companies operating under the FXOpen brand, nor is it to be considered financial advice.
by FXOpen
1
GBP/USD: Bullish Channel Meets Overbought Zone in RSISince March 3, an unprecedented bullish movement has emerged on the GBP/USD daily chart, with the pair accumulating a gain of over 3% during this period. The bullish pressure continues to be driven by uncertainty surrounding the trade war, which has gradually weakened the U.S. dollar, prompting investors to seek refuge in European currencies. Today, the market is showing a strong neutral candle, partly due to the expectation surrounding the Federal Reserve’s interest rate decision, which will be announced tomorrow, along with the Bank of England’s decision on Thursday. Until the outcomes of both central bank meetings are known, the neutral bias is likely to dominate short-term movements in GBP/USD. Bullish Channel Since mid-January, a consistent bullish pressure has developed in the pair, forming a short-term ascending channel. Currently, price movements are testing the upper boundary of this channel. If buying pressure remains strong, the bullish trend could accelerate in the coming sessions, leading to a steeper channel in the short term. RSI (Relative Strength Index) However, the RSI presents a different scenario. The upper boundary of the bullish channel coincides with the overbought zone, as the RSI oscillates near 70 . Additionally, higher highs in price and lower highs in the RSI indicate a persistent divergence. These two signals suggest that buying momentum may be slowing down, potentially leading to short-term bearish corrections. MACD (Moving Average Convergence Divergence) The MACD is showing a similar trend to the RSI. The signal line and MACD line are at levels not seen since August 2024, and a potential crossover could occur in the coming sessions. This indicates that the recent bullish momentum in moving averages is gradually fading, which could create room for selling corrections in the upcoming sessions. Key Levels to Watch: 1.29721 – Current Resistance: This significant resistance level sits at the upper boundary of the bullish channel and coincides with the 61.8% Fibonacci retracement level. Sustained breakouts above this level could accelerate buying pressure, leading to a stronger bullish move. 1.27700 – Near-Term Support: This support zone aligns with the 50% Fibonacci retracement level and could serve as a potential area for short-term bearish corrections. 1.26183 – Distant Support: This critical support aligns with the 50- and 100-period moving averages and the lower boundary of the larger bullish channel. A break below this level could jeopardize the current bullish formation, potentially triggering a stronger bearish move. By Julian Pineda, CFA – Market Analyst
by FOREXcom
GBPUSD - Dollar’s ​​view on jobs data!The GBPUSD pair is above the EMA200 and EMA50 on the 4-hour timeframe and is moving in its ascending channel. In case of a downward correction, the pair can be sold to narrow it. Last week ended with an unexpected shock for economists: estimates pointed to a significant trade imbalance in the United States for January, primarily driven by a sharp surge in imports. The data indicated that U.S. businesses had made extensive efforts to ramp up foreign purchases ahead of the imposition of new tariffs. Economic analysts expressed concerns that this trend could negatively impact U.S. GDP growth in the first quarter of 2025, as increased imports are typically subtracted from gross domestic product calculations. However, Goldman Sachs experts presented a different perspective. They argue that the unexpected surge in imports was mainly due to an influx of gold bars into the U.S.—a trend that reflects the dynamics of the global precious metals market and the price disparity between gold in London and New York. According to data cited by Goldman Sachs, the U.S. imported approximately $25 billion worth of gold in January, meaning that a substantial portion of the commodity trade deficit was driven by gold transactions. Since gold is generally considered a financial asset, these imports are not factored into GDP calculations. As a result, the actual economic impact of this growing trade deficit may be significantly lower than initially perceived. Currently, financial markets anticipate a 77-basis-point rate cut by the Federal Reserve this year. However, this expectation largely hinges on the trajectory of inflation. At the same time, uncertainty surrounding tariff policies remains high. A new report from the New York Federal Reserve indicates that inflation expectations among businesses have risen. According to the report, projected inflation for the next year has increased from 3% to 3.5% among manufacturing firms and from 3% to 4% among service-based companies. Additionally, many businesses foresee a significant rise in operational costs in 2025. Meanwhile, market pricing suggests that traders no longer expect the Bank of England to implement two rate cuts this year. Taylor, a member of the central bank, stated that every policy meeting carries great importance. He noted that the output gap—the difference between actual and potential production—may be larger than previous Bank of England estimates. Taylor emphasized that monetary policies should gradually return to normal and that a cautious approach is necessary when dealing with multiple price shocks. Furthermore, Andrew Bailey, Governor of the Bank of England, stressed that the economic outlook remains uncertain, with risks moving in both directions. He stated that while inflation is expected to rise, it will not resemble the severe inflationary periods of recent years. According to Bailey, decisions on rate cuts will depend on inflation trends, which have so far remained within an acceptable range. He also noted that the likelihood of second-round inflationary effects—where slowing economic growth leads to renewed price pressures—has diminished.
Short
by Ali_PSND
GBPUSD - Dollar’s ​​eye on the Fed?!The GBPUSD pair is above the EMA200 and EMA50 on the 4-hour timeframe and is moving in its ascending channel. In case of a downward correction, the pair can be bought within the specified demand range. The Federal Reserve of the United States has embarked on a process that could have profound implications for the global economy: a reassessment of the framework used to determine interest rates. These rates influence borrowing costs and prices not only in the U.S. but also across much of the world.To implement this reform effectively, the Federal Reserve must first identify the core issue. During the January meeting of the Federal Open Market Committee, central bank policymakers emphasized that the new framework must be “resilient to a wide range of conditions.” This marks a step in the right direction, given that the current framework, established in 2020, proved inadequate in responding to the economic disruptions caused by the COVID-19 pandemic. The 2020 framework was introduced at a time when inflation consistently remained below the Fed’s 2% target. To compensate for this shortfall, policymakers committed to allowing inflation to run above target. Specifically, the Fed pledged to keep short-term interest rates near zero until three conditions were met: • The economy achieved maximum sustainable employment, • Inflation reached 2%, • Inflation was expected to remain above 2% for some time. Additionally, interest rate hikes could not begin until the central bank had concluded its asset purchase program, known as quantitative easing (QE)—a process that itself depended on substantial progress toward meeting the three stated conditions. As a result, the Federal Reserve was significantly delayed in responding to a strong economy, a tight labor market, and accelerating inflation. When rate hikes finally began in March 2022, real GDP growth remained robust, unemployment was below the level deemed sustainable by policymakers, and the Fed’s preferred inflation gauge had already exceeded 5%. Despite these clear signals, debates persist about whether the Fed’s policy framework was to blame. Some argue that the central bank merely made a forecasting error, later compensating with aggressive monetary tightening. Fed Chair Jerome Powell has echoed this view, calling the framework “useless.” However, had the Federal Reserve disregarded this framework and instead adhered to traditional policy rules, it likely would have started raising short-term rates about a year earlier. Another argument is that the inflation surge, which was observed globally, was beyond the Fed’s control. However, in the U.S., surging demand for goods—bolstered by a massive fiscal stimulus—played a significant role in driving up global prices. Additionally, while many other countries faced dramatic increases in energy prices, this factor played a relatively minor role in the U.S. inflation spike. A third perspective holds that the Biden administration’s $1.9 trillion stimulus package was excessively large. While this undoubtedly contributed to economic overheating, it was still the Fed’s responsibility to account for its effects and respond with tighter monetary policy. Identifying these missteps is crucial. Otherwise, how can we be confident that the Federal Reserve won’t repeat them? Credibility is essential; without it, policymakers will struggle to influence financial markets and the broader economy effectively. To restore confidence, the Fed must address the shortcomings of the 2020 framework. It should abandon policies that kept interest rates artificially low for too long and adopt a more cautious approach to quantitative easing (QE) and quantitative tightening (QT). Finally, it should reconsider whether interbank interest rates remain the best policy tool or if focusing on the interest rate banks pay on reserves would be more effective.
Long
by Ali_PSND
GBP/USD: Bank of England's Cautious Tone Sparks DeclineThe British pound has retreated from its recent gains, succumbing to downward pressure as Bank of England (BoE) Governor Andrew Bailey voiced his apprehensions regarding the economic outlook. This cautious stance from the BoE's leadership has cast a shadow over the currency, prompting investors to reassess their positions. From a technical analysis perspective, the GBP/USD pair is currently navigating a critical zone, characterized by a supply area that has historically acted as a barrier to upward movement. Notably, the latest Commitments of Traders (COT) report reveals that retail traders are predominantly positioned on the bullish side of the market, suggesting a potential mismatch between market sentiment and the underlying fundamentals. Furthermore, seasonal patterns indicate that the pound may be on the cusp of a bearish momentum shift. This confluence of technical and seasonal factors has created a high-probability setup for a potential reversal, with the price action poised to challenge the recent uptrend. In light of these developments, we are actively seeking a short setup, anticipating that the pound's decline may gain momentum in the near term. The alignment of technical, fundamental, and seasonal forces suggests that the GBP/USD pair may be vulnerable to a corrective move, presenting an opportunity for traders to capitalize on the potential downturn. As the market continues to evolve, careful monitoring of the price action and trading sentiment will be crucial in determining the optimal entry and exit points for this potential short trade. ✅ Please share your thoughts about GBP/USD in the comments section below and HIT LIKE if you appreciate my analysis. Don't forget to FOLLOW ME; you will help us a lot with this small contribution.
Short
by FOREXN1
1
POUNDS CLIMBS amid Eco Growth & Slower Inflation. What's Next?A week ago BOE just cut it's rate by 25 bps and still have possibility to continue it's normalization cycle. Yesterday we saw GDP m/m actual data higher than expected and it's good for currency. YoY inflation rate also still in control and it's also good for currency. Technically, the bullish momentum just paused by trendline resistance and classical resistance. Pounds may have correction movement before he continue it's uptrend. Traders may use 1.25000 and see buy chance with a stoploss at 1.24440
Long
by vicariuzchrist
GBPUSD - Will the dollar return to the bullish trajectory?!US President Donald Trump has once again shown his mastery of political bluffs. He pushed negotiations with Mexico and Canada to the brink of crisis, there were numerous reports of increased tariffs and tougher measures, but in the end, he canceled everything. Instead, only a few symbolic measures were announced at the border, many of which had been discussed before. Now it seems that this scenario will be repeated again in the next 30 days. That this was a bluff was predictable from the beginning, but it was a challenging experience for analysts and markets. If you didn’t have a moment of doubt during this process, you probably weren’t paying close enough attention. But that’s the Trump strategy: in the market you have to have a strong belief that you are on the right track. When everyone is panicking, you have to stay calm and watch the process from the outside. The trade war has caused significant volatility in financial markets, and it’s not easy to make a profit in this environment. One of the main challenges was the timing. Last week, Trump announced that Mexico and Canada could do nothing to prevent the tariffs. But just days later, the two countries made almost no concessions and no tariffs were imposed. The signs of a shift in direction were already clear. The most important sign was the comments of Kevin Hassett, the White House economic adviser, who indicated that the talks were changing direction. He shifted the focus of the discussion to the problem of drugs and fentanyl, a shift that indicated that the Trump administration was looking to declare a victory in the negotiations. When even CNBC analysts noticed the change, it was clear that the direction of the talks had changed. “It doesn’t seem like you believe that these tariffs are going to happen, or that they will last very long,” one of the network’s hosts told Hassett in an interview. How did the financial markets react? The currency market was one of the best indicators to understand developments. While the stock markets were volatile, the trends in Forex were more transparent and occurred without random disturbances. The focus of attention on financial markets today is the Bank of England’s monetary policy decision. The Bank of England is expected to cut interest rates by 25 basis points, starting the new year. The decision will not come as a surprise, as OIS market data shows that traders have priced in a cut with a probability of around 92%. The cut will take the Bank of England’s policy rate to 4.50%, while policymakers continue to gradually reduce interest rates. However, the most important part of the decision will be the central bank’s statement and tone. The results of the December vote showed that there is a division among BoE policymakers. Dhingra, Ramsden and Taylor had voted for a 25 basis point cut earlier in the same meeting. The Bank of England continues to insist that “a gradual approach to removing monetary policy constraints remains appropriate.” This will remain the watchword for monetary policy today, even if interest rate cuts are implemented. But economic uncertainties remain. The December inflation report showed that price pressures have eased, but the trend is not sustainable. Analysts have made a few key points: • The decline in inflation has been driven largely by falling service prices. • But a closer look suggests that the decline may be temporary. Rob Wood of Pantheon Economics explained that the ONS’s calculation method has led to a drop in airline prices on December 10. The drop came before the Christmas break, when prices would normally have been expected to rise. Overall, the disinflationary trend remains unsustainable. With core inflation still above 3%, the Bank of England remains committed to keeping price pressures in check. Future Forecast: • The Bank of England will cut interest rates today as expected, but will emphasize that future actions will depend on economic data. • Traders do not expect interest rate cuts in February and March, but have forecast the next cut for May 2025. • In total, interest rate cuts for 2025 are estimated at around 83 basis points. Since the Bank of England is unlikely to make any clear commitments on the future course of its policies, the impact of this decision on the value of the pound and government bonds (Gilts) is expected to be limited. The GBPUSD currency pair is located between the EMA200 and EMA50 on the 4-hour timeframe and is moving in its ascending channel. In case of a downward correction, the pair can be bought within the specified demand zone.
Long
by Ali_PSND
EURGBP - Euro is recovering!?The EURGBP pair is below the EMA200 and EMA50 on the 4-hour timeframe and is moving in its ascending channel. The pair’s continued rise towards the supply zone will provide a selling position with a good risk-reward ratio. In case of a downside correction, we can buy in the demand zone. The Eurozone composite PMI rose from 49.6 to 50.2. Although this figure exceeds expectations, it still reflects a stagnant economy with the manufacturing sector in recession. While price pressures are once again on the rise, it appears that weak growth remains the primary concern, as the European Central Bank (ECB) prepares for further interest rate cuts. In the manufacturing sector, the production index increased from 44.3 to 46.8, which still indicates contraction but at a slower pace. Meanwhile, the services sector, which remains the main driver of growth, saw a slight dip in business activity PMI from 51.6 to 51.4. Overall, the Eurozone economy appears to be hovering near stagnation. Economic growth continues to face challenges due to weak international demand. Export orders are still declining, and with U.S. tariffs on Eurozone manufacturing rising again, the outlook remains bleak. Interestingly, however, optimism among manufacturers improved in January, suggesting businesses are counting on growth recovery throughout the year. We believe this expectation is reasonable but mainly driven by stronger domestic demand. The ECB has been gradually lowering interest rates since June 2024, and this trend is expected to continue into 2025. ECB President Christine Lagarde reiterated this gradual approach during the Davos summit this week. However, some investors are hoping for a 0.5% rate cut in January’s meeting. This scenario, though, seems unlikely, as inflation in the services sector remains around 4%, and wage growth has reached its highest level in three decades. At the same time, concerns about the Eurozone’s economic growth have increased due to political unrest in France and Germany, declining exports linked to China’s weak economy, and the potential for new tariffs imposed by Donald Trump. Nevertheless, the situation is not severe enough to prompt the ECB to accelerate rate cuts. The ECB is expected to lower rates by 0.25% in Thursday’s meeting, with Lagarde likely sticking to her recent policy stance. Investors will be watching closely for new clues about any disagreements within the ECB’s Governing Council and policymakers’ views on the neutral rate. If Lagarde does not rule out the possibility of more aggressive rate cuts in the future, the euro could face downward pressure. A larger potential risk lies in new developments on the tariff front, especially if Trump makes statements about imposing trade restrictions on the EU. Additionally, Thursday’s initial GDP estimate for Q4 2024 in the Eurozone could trigger market reactions. These figures could significantly influence market expectations and the euro’s trajectory.
Short
by Ali_PSND
GBPJPY - Will the pound continue to weaken?The GBPJPY currency pair is below the EMA200 and EMA50 in the 4-hour timeframe and is moving in its upward channel. If the corrective movement continues towards the supply zone, we can sell with a suitable risk reward. According to the latest Bloomberg survey, the UK government faces significant challenges in restoring investor confidence, as the pound and British bonds continue their downward trend. Following a decline in UK markets early in 2025 due to rising concerns over debt and inflation, about 51% of the 250 participants in last week’s survey predicted the pound would fall to between $1.15 and $1.20 by the end of June. This would mark the currency’s weakest level in over two years. Meanwhile, 45% of participants anticipate greater volatility in the pound, with 10-year UK bond yields expected to rise above 5% this year.Taylor, a member of the Bank of England, emphasized the importance of staying vigilant against potential risks. He suggested that recent data indicate a worsening economic outlook and that interest rates should be reduced promptly to avoid further challenges. In Japan, households expect prices to rise in the coming year. The percentage of households with such expectations increased slightly from 85.6% in the previous survey to 85.7%. However, five-year inflation expectations have seen a slight decline. According to the Bank of Japan, average annual inflation expectations among households stand at 11.5%, based on the latest survey. Goldman Sachs economists predict that the Bank of Japan will raise interest rates next week. The firm also remains optimistic about the yen, expecting any action by the Bank of Japan in January to support the currency. Market pricing suggests that an interest rate hike by the Bank of Japan is almost certain. According to Bloomberg, Kazuo Ueda, Governor of the Bank of Japan, will evaluate the need for a rate hike on Friday. Expectations for an interest rate increase have grown, provided that potential shocks from the early days of Trump’s presidency do not materialize. While other central banks, particularly the Federal Reserve, are focused on rate cuts, the Bank of Japan is moving in the opposite direction, aiming for a gradual return to conventional monetary policies. The Bank of Japan is set to announce its first interest rate decision of 2025 on Friday. During its final meeting in 2024, the bank decided to keep rates unchanged. Governor Ueda stated that more data is needed to justify a rate hike, highlighting concerns about wages and uncertainties surrounding Trump’s economic policies. Since then, new data has shown a significant rise in November inflation, with December inflation pressures also intensifying. Wages also grew in November. Additionally, a summary of opinions from the December meeting indicates that a rate hike could occur sooner than investors anticipate. Given these developments and recent remarks from BoJ officials, investors assign an 80% probability to a 0.25% rate hike. However, the Bank of Japan has a long history of disappointing expectations for rate increases. If Trump adopts an aggressive stance on tariffs in his upcoming speech, the BoJ may once again refrain from raising rates, potentially leading to a decline in the yen. If the Bank of Japan does raise interest rates, the yen is likely to strengthen, but the associated risks are asymmetrical. The negative impact of refraining from a hike could outweigh the positive effect of an increase. Nonetheless, a further decline in the yen might prompt Japanese authorities to intervene to support the currency.
Short
by Ali_PSND
EURGBP - Will the pound continue to fall?The EURGBP currency pair is above the EMA200 and EMA50 in the 4-hour timeframe and is moving in its upward channel. The continued rise of this currency pair towards the supply zone will provide a position to sell it with a suitable risk reward. In case of downward correction, we can buy within the demand zone. Yesterday, Reeves, the UK Chancellor of the Exchequer, faced questions from Members of Parliament following a significant increase in the sale of UK government bonds. Sir Lindsay Hoyle, the Speaker of the House of Commons, accepted an urgent query raised by Conservative opposition members. This compelled Reeves to appear in Parliament on Thursday morning, as the yield on 10-year UK government bonds surged to 4.93%, the highest level since 2008. The pound also dropped during this market turmoil, reaching $1.224, its weakest level since November 2023. The rising yields on UK government debt have posed a serious challenge to Reeves’ fiscal plans, constraining the government’s borrowing capacity under its budgetary rules. Borrowing costs have spiked as investors grow increasingly concerned about the government’s heavy borrowing needs and the mounting risk of stagflation. Jones, a senior official at the UK Treasury, stated that only the Office for Budget Responsibility (OBR) could predict the impact of bond market movements on the fiscal outlook. He emphasized that the government remains committed to strict fiscal rules, ensuring public spending stays within budget limits. He also noted that public services must operate within their allocated resources, dismissing the need for any emergency intervention by the Treasury. Meanwhile, Breeden, a member of the Bank of England, commented that recent data suggest it may be time to ease restrictive policies.She expressed the need to understand the causes behind the slowdown in economic activity and how employers are coping with higher hiring costs. While economic activity appears somewhat subdued, Breeden added that it is expected to rebound. According to a Citi/YouGov survey, UK households’ one-year inflation expectations have risen to 3.7%, while their long-term inflation expectations have climbed to 3.9%. Concurrently, the UK Debt Management Office plans to syndicate and reissue the 4.375% 2040 bonds in the week starting January 20. This move aims to finance the government and manage public debt. Separately, Cipollone of the European Central Bank remarked that monetary policy should enable the Eurozone economy to operate at full capacity while avoiding demand reductions that could trigger inflationary shocks. He highlighted structural issues in Europe’s industrial sector, including declining productivity relative to the US and excessive reliance on foreign technological solutions. Cipollone further noted that Europe has lost its edge in innovation and scalability due to fragmented markets and a defensive, nationalist approach.
Long
by Ali_PSND
British Pound Sterling (GBP): A History and Trading OverviewBritish Pound Sterling (GBP): A History and Trading Overview The British pound, one of the oldest and most traded currencies, holds a central role in the global forex market. Known for its volatility and economic significance, the pound presents unique opportunities and challenges for traders. This article explores British money’s history, key factors driving its value, major trading pairs, and insights into how it’s traded. Origins and Historical Evolution of British Pound Sterling The British Pound Sterling, represented by the pound symbol £ and known by the British pound abbreviation GBP, has a rich history stretching back over a thousand years, making it one of the oldest continuously used currencies. Its origins trace to the Anglo-Saxon period, around the 8th century, when it was first introduced as a silver-based currency. Back then, one pound of sterling silver could be divided into 240 silver pennies—a substantial amount. The currency evolved as England developed its economy and trading networks, solidifying the pound’s status as a cornerstone of UK money and commerce across Europe. During the late 17th century, the establishment of the Bank of England in 1694 marked a turning point, allowing the British government to issue notes and coins on a larger scale. Later, the central bank adopted the gold standard in the 19th century and pegged the pound’s value to gold, enhancing its stability and appeal. However, the turbulent economic climate following World War I and the Great Depression led to abandoning the gold standard, allowing the pound to float in value—a status it maintains today. Why Is a Pound Called Sterling? The term “sterling” is linked to the British currency’s origins as high-quality silver coins. Medieval England’s silver coins, made primarily from “sterling” silver, had a reputation for purity and reliability, giving rise to the enduring name “Pound Sterling.” This name reflects the currency's legacy as a reliable and trusted medium of exchange. Is a Quid the Same as Pounds? Yes, a pound vs quid refers to the same unit of currency. In the UK, British “quid” is just informal slang for one pound. Similar to how Americans might say “buck” for a dollar, “quid” is used informally across the UK. Whether referring to the British pound sign £1 or a larger amount, there is no difference between “quid” and “pound” in everyday conversation, although “quid” isn’t an official term and doesn’t appear on banknotes or coins. In comparing a quid vs pound vs pence, quid and pound refer to the same unit of currency: one pound. In contrast, a pence is worth 1/100th of a pound. 100 pence make up a pound, akin to how 100 cents make up a dollar. The British Pound in the 20th Century In the 20th century, the pound faced dramatic shifts as Britain navigated global economic challenges and geopolitical shifts. After World War I, Britain tried to reinstate the gold standard in 1925, hoping it would bring stability. However the post-war economy was fragile, and by 1931, the gold standard was abandoned permanently, allowing the pound to fluctuate with market conditions. This move was crucial—it marked the pound’s transition to a free-floating currency, where its value was driven by demand and supply rather than a fixed link to gold. World War II and its aftermath further tested the pound’s resilience. Britain’s economy suffered significant losses, and by 1949, the government was forced to devalue the pound by about 30% against the dollar to support post-war recovery efforts. The pound experienced another major drop in 1967, as Britain faced growing debt and economic pressure. Fast forward to 1992, and the pound’s status faced another test during the “Black Wednesday” crisis. Britain’s attempt to keep the pound within the European Exchange Rate Mechanism (ERM) led to massive currency speculation. As traders shorted the GBP, meaning they expected it to lose value, the government struggled, ultimately withdrawing from the ERM—a pivotal decision that set the pound free from strict European exchange constraints. Factors Driving the British Pound Several key factors influence the value of the UK’s currency, from economic indicators to political events, making it a responsive currency in the forex market. Interest Rates and Monetary Policy The British pound’s value is heavily influenced by the Bank of England (BoE) and its monetary policies. The BoE’s primary tool for managing the pound is its interest rate policy. When the BoE raises rates, it often strengthens the pound by attracting investors seeking higher returns on UK assets. Conversely, lowering rates can weaken the pound, as it reduces the currency's appeal. The BoE’s Monetary Policy Committee meets regularly to assess economic conditions and decide on potential adjustments. Statements from these meetings can create significant market reactions, as traders interpret them for clues on future policies. In addition to interest rates, the BoE may also implement quantitative easing (QE) during economic downturns, increasing the money supply to stimulate growth. While the QE can help the economy, it often weakens the pound due to an increase in supply. The actions of other central banks also impact the pound’s value relative to another currency. For instance, if the Fed raises rates while the BoE keeps theirs unchanged, the dollar could strengthen against the pound. Major Economic Indicators and Events The British pound’s value is highly responsive to a range of economic indicators and events, as these reflect the health of the UK economy and inform expectations for future growth. GDP Growth Gross Domestic Product (GDP) figures are a crucial indicator for the pound. Solid GDP growth indicates a strong economy, which often strengthens the currency. Conversely, sluggish growth or contraction signals economic trouble, which can weaken the pound. Traders closely watch quarterly GDP releases as they give direct insight into the UK’s economic performance. Inflation Rates Inflation is a key driver for the pound due to its direct link with interest rates. The Bank of England targets a 2% inflation rate, and if inflation rises significantly above this level, the BoE may respond by raising rates, which tends to strengthen the pound. Low or declining inflation can have the opposite effect, reducing the likelihood of rate hikes and putting pressure on the currency. Employment Data Employment reports, especially the monthly unemployment rate and wage growth data, offer a snapshot of the labour market’s health. A low unemployment rate and rising wages indicate economic strength, typically supporting the pound. Weak employment data, on the other hand, can signal economic challenges, potentially leading to a weaker currency. Global Risk Sentiment The British pound has a complex relationship with global risk sentiment, sometimes acting as a “risk barometer” for the UK and global markets. Unlike so-called traditional safe-haven currencies like the US dollar or Japanese yen, the pound doesn’t have a role as a refuge during periods of market stress. During times of global uncertainty, the pound can weaken as investors move funds into potentially safer assets. For example, during major economic downturns or political crises, traders might sell off the pound in favour of currencies like the dollar or yen, which are seen as more resilient. This behaviour stems from the pound’s relatively high volatility. On the other hand, in periods of optimism or risk-on sentiment, the pound can attract investment, especially if the UK economy is performing well. The currency benefits from the UK’s open financial market, which can draw in foreign capital when investors feel confident about economic growth. Political Events The pound is highly sensitive to domestic political developments like any other currency. Events like general elections, referendums, and policy decisions usually cause swift price movements. For example, Brexit created significant uncertainty, leading to heightened pound volatility. Political stability, or lack thereof, affects investor confidence, influencing the pound's value in response to perceived risks or opportunities. Trade Relationships The UK's trade balance, particularly with key partners like the EU and the US, also impacts the pound. A positive trade balance (more exports than imports) often supports the currency, while a deficit can put downward pressure on it, as more pounds are exchanged for foreign currency to pay for imports. Trading the British Pound Trading the British pound offers opportunities for those interested in both major and cross-currency pairs. Its reputation for volatility and responsiveness to economic data makes it an appealing choice for various trading strategies. What Is the Best Pair to Trade With GBP? Traders can trade the pound through several pairs, each offering unique characteristics. GBP/USD is the most popular, providing high liquidity and frequent price movement. This pair is particularly attractive for traders who closely follow UK and US economic indicators, as these two economies often drive its volatility. GBP/JPY is another popular choice for those seeking higher volatility, as it tends to have larger price swings due to the yen’s so-called safe-haven status. Additionally, EUR/GBP is favoured by those interested in the close economic ties between the UK and the Eurozone, often providing interesting trends influenced by regional economic policies. Technical Analysis GBP pairs are well-suited to technical analysis, with traders commonly using tools like support and resistance levels, trendlines, and moving averages. Patterns such as double tops and bottoms are frequently observed, and indicators like the MACD and RSI can help identify potential entry points based on overbought or oversold conditions. GBP’s volatility makes it ideal for momentum-based strategies, where traders look for strong price movements to capture gains. Fundamental Analysis Fundamental analysis is essential when trading the pound, given its sensitivity to UK economic data and Bank of England (BoE) monetary policy. Traders often monitor GDP growth, inflation, employment figures, and BoE’s interest rate decisions, as these have immediate effects on pound valuation. Additionally, political events such as elections or Brexit-related developments can create rapid shifts, making it crucial to stay informed about current affairs that could impact the currency. Risk Management Given the pound’s volatility, effective risk management is vital. Traders may potentially enhance their strategies by setting appropriate stop-loss levels and position sizing to account for the currency’s larger price swings. Observing correlations with other currencies, like EUR/USD, can also help manage exposure and offer additional insights when the pound exhibits similar or diverging trends. GBP/USD Pair Characteristics So what is GBP known for today? In the modern age, the pound is easily recognised by the pound’s sign (£) and remains one of the most traded currencies worldwide, particularly in pairs like GBP/USD, known as “Cable.” This pair represents the exchange rate between the British pound and the US dollar, capturing the relationship between two of the world’s largest economies. Liquidity and Volatility GBP/USD is known for high liquidity, especially during London and New York trading hours when the UK and US markets overlap. This liquidity attracts significant trading volume, leading to relatively tight spreads, especially during peak trading times. However, GBP/USD is also notably volatile, meaning it can experience sharp movements over short periods. This volatility is often driven by economic releases, political events, and market sentiment. Role in Forex Market As one of the major currency pairs, GBP/USD is a cornerstone of forex trading. It represents around 9% of total daily forex turnover. Traders follow it closely due to its sensitivity to key economic indicators, interest rate decisions, and policy changes from the Bank of England and the Federal Reserve. GBP/USD's unique position as both a "major" and an often volatile pair allows it to reflect broader market trends and risk sentiment effectively. Which Pair Correlates With GBP/USD? The GBP/USD pair frequently shows a correlation with other major pairs, particularly EUR/USD. This is largely due to their shared link to the US dollar. When EUR/USD experiences a strong trend, GBP/USD may often follow suit, although the unique economic factors affecting the UK and Eurozone can cause deviations in their movements. Additionally, USD/CHF often shows an inverse correlation with GBP/USD, as the Swiss franc serves as a so-called safe-haven currency (more so than the US dollar), moving oppositely in risk-off markets. To explore these correlations, head over to FXOpen’s free TickTrader platform to get started with real-time forex charts. The Bottom Line The British pound remains a dynamic and influential currency in forex markets, offering ample opportunities for traders at all levels. Its rich history, market responsiveness, and diverse trading pairs make it an essential choice for those looking to engage in global currency trading. To start trading the pound and other pairs with it, open an FXOpen account and take advantage of four advanced trading platforms, low costs, and fast execution speeds. FAQ What Is GBP Currency? GBP is the abbreviation for the British pound, the official currency of the United Kingdom. Often referred to as “British pound sterling,” it’s one of the oldest and most traded currencies globally, denoted by the pound symbol, £. Is GBP Getting Stronger Against the Euro? The pound’s strength against the euro fluctuates based on economic conditions in the UK and Eurozone. As of late 2024, the pound has been getting stronger against the euro recently due to a less restrictive monetary policy stance from the European Central Bank. What Country Has the Oldest Currency? The UK has the world’s oldest currency still in use. The pound sterling dates back over a thousand years, tracing its origins to the Anglo-Saxon period. When to Trade GBP Pairs? GBP pairs are most active during the London trading session, from 8 a.m. to 4 p.m. GMT. Volatility can increase when UK or US economic data is released. Which GBP Pair Is Most Volatile? GBP/JPY is typically the most volatile GBP pair, due to the yen’s role as a so-called safe-haven currency. It can experience larger price fluctuations compared to other GBP pairs. This article represents the opinion of the Companies operating under the FXOpen brand only. It is not to be construed as an offer, solicitation, or recommendation with respect to products and services provided by the Companies operating under the FXOpen brand, nor is it to be considered financial advice
Education
by FXOpen
1
GBP/USD Technical Analysis: Key Levels and Possible ScenariosThe chart focuses on GBP/USD in the 1-hour timeframe, highlighting critical resistance levels and potential downside targets. The current setup indicates rejection from a resistance zone, with a potential move toward the predefined price targets. Key Levels: Resistance Zone at 1.2580–1.2590: This area has acted as a strong resistance, with the price failing to break above it. A breakout above this zone could shift the market sentiment and pave the way for further upside toward 1.2600+. Downside Targets: 1.25124 and 1.25012 have been identified as key bearish targets. These levels represent potential areas where the bearish momentum may slow down or pause. Indicator Insights: DT Oscillator: Currently trending downward, indicating bearish momentum in the short term. A further drop toward oversold territory could coincide with the price approaching the bearish targets. Scenarios: Bearish Scenario: Continued rejection from the 1.2580–1.2590 resistance zone could lead the price toward the bearish targets at 1.25124 and 1.25012. A breakdown below 1.25012 could accelerate the downside movement further. Bullish Scenario: If the price reverses and breaks above the 1.2580–1.2590 resistance zone, it could invalidate the bearish outlook and signal a potential move toward higher levels, such as 1.2600+. Conclusion: GBP/USD is showing signs of bearish momentum, with 1.2580–1.2590 acting as a strong resistance and 1.25124 and 1.25012 identified as key downside targets. Traders should monitor price reactions at these levels and use confirmation signals, such as momentum shifts, to adjust their strategies accordingly. Feel free to share your thoughts in the comments and follow me for more detailed analyses!
Short
by Mohammad_Mirdehghan
GBP/USD: Market Sentiment and the Road Ahead for the PoundFollowing up on our previous analysis of GBP/USD, it has been a tumultuous week for the Pound, which experienced significant declines on Wednesday and Thursday. Although GBP/USD managed a brief correction higher on Friday, it ultimately closed the week in negative territory. At the time of writing, the pair is in a consolidation phase, trading below the 1.2545 mark. The sharp drop in GBP/USD can be attributed to the Federal Reserve's (Fed) hawkish dot plot, coupled with the Bank of England's relatively dovish stance after its final policy meeting of the year. This combination led to a notable downturn in the currency pair. However, as we approached the weekend, a more positive shift in market sentiment emerged due to the US Congress successfully averting a government shutdown, which caused the US Dollar (USD) to weaken against its peers. This turn of events allowed GBP/USD to recover some of its earlier losses. From a technical analysis perspective, we are anticipating continued bearish momentum for the Pound against the USD as we approach the next demand zone. Previous Idea: ✅ Please share your thoughts about GBP/USD in the comments section below and HIT LIKE if you appreciate my analysis. Don't forget to FOLLOW ME; you will help us a lot with this small contribution.
Short
by FOREXN1
1
GBP/USD at a Critical Support Level: What comes next?The GBP/USD pair has fallen more than 7% since September 26, 2024, largely in response to the strengthening of the USD following Donald Trump's recent victory in the US presidential election. However, it appears that GBP/USD has found significant support on the daily chart, forming a double bottom pattern in the 1.2500 region. This level has been an important reference point throughout 2023 and is poised to act as support once again. Confluence of Factors Several elements suggest a potential upward movement in GBP/USD: 7% Decline Without Significant Retracement: The pair has seen a substantial decline since September without any meaningful pullbacks. Key Support Region: The price has touched an important support level on the daily chart. Double Bottom Formation: The emergence of a double bottom pattern on the daily chart adds further support to the bullish hypothesis. Considering these points, a long setup could be contemplated if the candle on the daily chart for December 23 closes above the high of the preceding candle. This would create a bullish Engulfing Pattern, which is often viewed as an ignition signal and a buying opportunity. Potential Targets for a Long Trade 1.2800: This target is a previous resistance point that previously hindered further price increases. It also represents a round number, offering approximately 180 pips from the entry point. 1.3000: Another significant resistance level and round number, approximately 380 pips from the entry point. Stop Loss A suitable stop loss could be placed slightly below support on the daily chart at around 1.2470, providing a distance of approximately 150 pips from the entry point. Alternative Scenario Should GBP/USD break below the support level on the daily chart, the next downward movement could see it fall to the 1.2330 level, where it may find another area of support. Impact of Economic Data: UK GDP and US Consumer Confidence The upcoming release of UK GDP data should be closely monitored, as it is a critical indicator of the health of the UK economy. If the reading comes in lower than expected, the market may speculate that the Bank of England (BoE) could be forced to cut interest rates to stimulate growth, potentially leading to a depreciation of the Pound. Meanwhile, US Consumer Confidence data is likely to affect market volatility as household consumption accounts for approximately two-thirds of GDP. A reading that exceeds expectations could indicate strong consumer confidence in the economic outlook, which might lead to inflationary pressures and prompt the Federal Reserve (Fed) to consider raising interest rates, thereby strengthening the USD. As the GBP/USD pair approaches a crucial support level, the technical indicators suggest a potential for upward movement. However, traders should remain vigilant of the upcoming economic data releases and consider how they might influence market dynamics. Combining technical analysis with fundamental insights will enhance the likelihood of making well-informed trading decisions during this pivotal moment. Disclaimer 74% of retail investor accounts lose money when trading CFDs with this provider. Consider whether you understand how CFDs work and if you can afford the high risk of losing your money. Past performance is not indicative of future results. Investment values may fluctuate, and you may not recover your initial investment. This content is not intended for residents of the UK.
Long
by Marketscom
GBPAUD - Employment in Australia is at good levels!The GBPAUD currency pair is above the EMA200 and EMA50 in the 4H timeframe and is moving in its upward channel. In case of failure of this channel, we can see the demand zone and buy within that zone with appropriate risk reward. Continuing to move in the channel will pave the way for this currency pair to rise to the supply zone. Within the supply zone can look for GBPAUD sell positions. 1. Renewable Energy in the UK: British ministers are preparing for the largest renewable energy subsidy auction in the country’s history to achieve the challenging goal of generating clean electricity by 2030. Ed Miliband, the Energy Secretary, is set to launch the “2030 Clean Electricity Action Plan” today, aiming to decarbonize the power system by the end of the decade. A recent auction secured funding for 131 clean energy projects, guaranteeing 9.6 gigawatts of energy capacity, enough to power 11 million homes. Government officials plan to hold the largest auction to date by 2025 to meet the 2030 target of at least 95% low-carbon electricity. 2. Trump’s Proposed Tariffs: According to a Reuters survey, most economists believe that Trump’s proposed tariffs would have minimal impact on the UK economy. The survey revealed that the Bank of England is likely to cut interest rates by 100 basis points by 2025, with reductions probably occurring quarterly at 25 basis points each. Additionally, all 71 economists surveyed predicted that the central bank would hold the interest rate steady at 4.75% during its December 19 meeting. 3. Challenges in AI Oversight: The UK is facing challenges in its efforts to expand global oversight of artificial intelligence. The country aims to strengthen its “Artificial Intelligence Safety Institute” (AISI) and solidify its position as a leading institution in researching AI risks. However, plans to open a new office in San Francisco have been delayed due to elections in the US and the UK, as well as hiring challenges. 4. London’s IPO Market Decline: The London Stock Exchange, once a leading and prestigious center for initial public offerings (IPOs), has now fallen to 20th place among global markets, recording none of the top 100 IPOs in 2024. Markets like Oman, Malaysia, and Luxembourg have outperformed London in attracting IPO capital. The outflow of companies from the London Stock Exchange has also risen, exacerbated by 41 consecutive months of capital outflow from UK equity funds, increasing pressure on market brokers to merge or sell. 5. Australia’s Unemployment Rate: Australia’s unemployment rate in November dropped to its lowest level in eight months, while employment continued its strong growth trend. This surprising strength led markets to reassess the likelihood of a rate cut in February, following the Reserve Bank of Australia’s unexpected dovish shift that hinted at potential monetary easing. Data from the Australian Bureau of Statistics showed that the unemployment rate fell from 4.1% in October to 3.9% in November, the lowest since March. Analysts had expected unemployment to rise to 4.2%. The participation rate declined from 67.1% to 67.0%. Net employment in November increased by 35,600 compared to a revised figure of 12,200 in October, exceeding market expectations of a 25,000-job gain, driven largely by full-time employment growth.
Short
by Ali_PSND