- The GBP/USD outlook shows a steady pound as market participants watch developments on tariffs.
- Trump threatened to impose a 50% tariff on copper imports.
- Traders are waiting for the UK GDP report.
The GBP/USD outlook shows a steady pound as market participants watch developments on tariffs. A BoE report revealed that risks to the financial markets remain, especially from US tariffs. Meanwhile, market participants are awaiting the UK GDP report, scheduled for release on Friday.
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Trump’s recent tariff threats weighed on most major currencies except the pound. The UK has already signed a trade deal with the US that provides it with some protection from higher tariffs. However, the UK economy cannot avoid the global impact of these levies. Trump threatened to impose a 50% tariff on copper imports, which could spark new trade wars. These conflicts are likely to harm the global economy, which includes the UK.
A report released by the Bank of England on Thursday revealed concerns about the impact of tariffs. It stated that risks to the financial markets remain high. Therefore, policymakers might prefer caution in the face of uncertainty. However, they might be forced to lower rates further in the event of an economic slowdown.
Meanwhile, traders are waiting for the UK GDP report. Economists expect a 0.1% growth compared to the previous 0.3% contraction.
GBP/USD key events today
GBP/USD technical outlook: Narrow range points to looming breakout
On the technical side, the GBP/USD price has paused at a solid support zone comprising the 1.3600 key level and the 0.5 Fib retracement level. Still, the price has remained below the 30-SMA, with the RSI slightly under 50, supporting a bearish bias.
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Initially, bears took charge with solid momentum, pushing the price below the 30-SMA. However, this momentum began to fade after the price reached the 1.3600 level. The price started trading in a corrective sideways move, and the SMA line flattened out. This is a sign that neither bears nor bulls are willing to make big swings. It also indicates indecision.
However, as he range narrows, the price will soon break above the SMA or below the support zone. An SMA break would signal a shift in sentiment. On the other hand, a break below the support zone would allow GBP/USD to target the 1.3400 support level.
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