- As predicted in previous technical analyses of the GBP/USD currency pair, the pair's gains were likely to collapse quickly.
- At the beginning of this week's trading, the GBP/USD retreated to the support level of 1.2680 after gains at the end of last week reached the resistance level of 1.2750, the highest for the currency pair in two weeks.
Trump's Trade Wars Boost the Dollar
According to reliable trading platforms, the GBP/USD pair relinquished its recent gains as Trump ignited investor appetite for the US dollar after last week's holiday by threatening to escalate his trade wars, announcing his intention to impose tariffs on imports from China, Mexico, and Canada as soon as he takes office. More recently, he threatened to impose a 100% tariff on all BRICS countries if they considered abandoning the dollar and creating an independent currency. Overall, these plans will increase fears of a global economic slowdown, increasing demand for the US dollar as a safe haven.
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Pound Sterling Pressures Persist
According to recent trades, the pound sterling has remained under pressure due to several factors. Recently, we have not found any significant UK economic data, leaving the pound sterling vulnerable. Overall, investors and markets remain concerned about the UK's economic outlook, as recent data indicates a sharp slowdown in activity in the second half of 2024. According to economic calendar data, recent UK Purchasing Managers' Index figures were particularly worrying, revealing a contraction in private sector activity for the first time in a year.
What Will Affect the Pound in the Coming Days?
The GBP/USD exchange rate is likely to remain influenced by overall market sentiment. If risk-off sentiment persists, it could strengthen demand for the US dollar as a safe haven, potentially extending the US dollar's recovery. At the same time, the pound sterling will continue to be under pressure from weak investor sentiment.
Technical Analysis for the GBP/USD pair today:
According to the performance on the daily chart above, despite the recent rebound, the broader overall trend of the GBP/USD currency pair remains downward. As mentioned earlier, dear reader, the psychological resistance of 1.3000 will remain the most important level for the first upward shift in the trend. If the bears return the currency pair below the 1.2660 support, it will strengthen the downward movement and strengthen the expectations for a future return to the more important support of 1.2500. From this level, technical indicators will move towards strong oversold levels, led by the performance of the RSI and MACD indicators. For long-term forecasts, Bank of America expects the GBP/USD exchange rate to rise to 1.38 by the end of 2025, with a further rise to 1.49 by the end of 2026. However, ING Bank expects the strength of the dollar to dominate and forecasts the GBP/USD exchange rate to reach 1.24 over the next 12 months.
GBP/USD Signals Today:
We still recommend selling the GBP/USD currency pair from every upward level. To get more free trading siganls, we invite you to visit the special page on our website. Please consider using a trading strategy that avoids risk and activates take-profit and stop-loss orders to ensure the safety of your trading account from any sudden price fluctuations.
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