GBP/USD moved sharply lower on Thursday, validating the downside wedge risk highlighted earlier in the week as sterling finally starts reacting negatively to intensifying political turmoil in Britain. What had looked like a curious divergence between deteriorating UK political fundamentals and resilient pound price action now appears to be correcting rapidly, compounded by a simultaneous breakout in the dollar.
British pound technical outlook turns cautious as key resistance holds and downside risks build, according to Michael Boutros, Senior Market Analyst at FOREX.com. He highlights the failure at a major Fibonacci retracement, emerging reversal signals, and critical support levels now coming into focus.
The US dollar continues to move on the latest moves in the interest rate markets in the USA.
GBP/USD held at 1.3528 on Thursday following an overnight decline. The pound remains under pressure, close to its lowest levels since late April, amid media reports of a potential leadership contest within the ruling party.
April CPI hotter than expected has given the Dollar fresh support by cooling rate-cut optimism. DXY consolidates near $98.50, EUR/USD holds $1.171 trendline, and GBP/USD defends $1.351 channel floor.
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Looking at the 4-hour chart, the pair traded below a bullish trend line with support at 1.3580. There was a sharp decline below 1.3550 and the 100 simple moving average (red, 4-hour).
GBPUSD managed to pass above the resistance of 1.3485 to meet the first target at 1.3580. As we see over the chart, the market is facing the first support zone at 1.3485, where if prices remain above it, more advance will be expected with resistances at 1.3580 and 1.3710-35.
GBP/USD Price Forecast: Extends decline below 20-day EMA
April CPI hotter than expected has given the Dollar a lift by cooling aggressive rate-cut expectations. DXY tests $98.59 while EUR/USD holds $1.170 and GBP/USD defends $1.351.
Intraday analysis covering GBPUSD hits another low, XAUUSD, and USOIL, focusing on short-term price action, key support and resistance levels, and intraday market momentum across major instruments. GBPUSD hits another low Cable continues to lose its dominance in the market, with price action falling to another fresh low.