GBP/USD Price Forecast: Snaps three-day losing streak as market sentiment improves
- GBP/USD rises to near 1.3345 as market sentiment turns favorable for riskier assets.
- US President Trump extended the postponement of scheduled military action on Iran’s power plants.
- Investors await UK Retail Sales data for February.
The GBP/USD pair snaps its three-day losing streak on Friday, trading 0.1% higher to near 1.3345 during the Asian trading session. The Cable rises as the market sentiment turns favorable for riskier assets, following United States (US) President Donald Trump’s extended pause on scheduled attacks on Iranian power plants until April 6, which boosts hopes of de-escalation in conflicts in the Middle East.
As of writing, S&P 500 futures trade 0.3% higher to near 6,500, indicating an improvement in investors’ risk appetite. Meanwhile, the US Dollar Index (DXY), which tracks the Greenback’s value against six major currencies, trades flat near a three-day high of around 100.00.
Late Thursday, US President Trump said through a post on Truth.Social, “I am pausing the period of Energy Plant destruction by 10 Days to Monday, April 6, 2026, at 8 P.M., Eastern Time,” and expressed confidence that talks with Iran regarding an end to the Middle East war are going well.
In Friday’s session, investors will focus on the United Kingdom (UK) Retail Sales data for February, which will be published at 07:00 GMT. Month-on-month Retail Sales, a key measure of consumer spending, is estimated to have declined 0.8% after a 1.8% growth seen in January. On an annualized basis, the consumer spending measure is expected to have risen at a moderate pace of 2.1% against the previous reading of 4.5%.
GBP/USD technical analysis
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GBP/USD trades higher at around1.3345 as of writing. The near-term bias is bearish as recent lower highs reinforce the downside tone. The spot trades close to the 20-day Exponential Moving Average (EMA), which has flattened after a prior decline and now caps the upside around 1.34.
The 14-day Relative Strength Index (RSI) oscillates in the 40.00-60.00 zone, signaling a pause in the bearish momentum, while the bearish bias remains intact.
Initial resistance emerges at the 20-day EMA near 1.3400, followed by the March 23 high around 1.3480, where recent supply halted rebounds. A daily close above that level would ease the bearish pressure and open the way toward the mid-1.35 region. On the downside, immediate support aligns with Monday's low at 1.3257, with a break exposing the next bearish target at 1.3220. A drop through 1.3220 would confirm a stronger downward extension toward the 1.31 area.
(The technical analysis of this story was written with the help of an AI tool.)
Pound Sterling FAQs
The Pound Sterling (GBP) is the oldest currency in the world (886 AD) and the official currency of the United Kingdom. It is the fourth most traded unit for foreign exchange (FX) in the world, accounting for 12% of all transactions, averaging $630 billion a day, according to 2022 data. Its key trading pairs are GBP/USD, also known as ‘Cable’, which accounts for 11% of FX, GBP/JPY, or the ‘Dragon’ as it is known by traders (3%), and EUR/GBP (2%). The Pound Sterling is issued by the Bank of England (BoE).
The single most important factor influencing the value of the Pound Sterling is monetary policy decided by the Bank of England. The BoE bases its decisions on whether it has achieved its primary goal of “price stability” – a steady inflation rate of around 2%. Its primary tool for achieving this is the adjustment of interest rates. When inflation is too high, the BoE will try to rein it in by raising interest rates, making it more expensive for people and businesses to access credit. This is generally positive for GBP, as higher interest rates make the UK a more attractive place for global investors to park their money. When inflation falls too low it is a sign economic growth is slowing. In this scenario, the BoE will consider lowering interest rates to cheapen credit so businesses will borrow more to invest in growth-generating projects.
Data releases gauge the health of the economy and can impact the value of the Pound Sterling. Indicators such as GDP, Manufacturing and Services PMIs, and employment can all influence the direction of the GBP. A strong economy is good for Sterling. Not only does it attract more foreign investment but it may encourage the BoE to put up interest rates, which will directly strengthen GBP. Otherwise, if economic data is weak, the Pound Sterling is likely to fall.
Another significant data release for the Pound Sterling is the Trade Balance. This indicator measures the difference between what a country earns from its exports and what it spends on imports over a given period. If a country produces highly sought-after exports, its currency will benefit purely from the extra demand created from foreign buyers seeking to purchase these goods. Therefore, a positive net Trade Balance strengthens a currency and vice versa for a negative balance.
Nothing in this material constitutes investment advice, personal recommendation, investment research, an offer, or a solicitation to buy or sell any financial instrument. The content has been prepared without consideration of your individual investment objectives, financial situation, or needs, and should not be treated as such.
Past performance is not a reliable indicator of future performance and/or results. Forward-looking scenarios or forecasts are not a guarantee of future performance. Actual results may differ materially from those anticipated.
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