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Trade of The Day: GBP/USD

Facts

  • GBPUSD has been trading below the EMA10 on the D1 timeframe for the ninth consecutive session.
  • RSI has returned to the 40 level.
  • The Guardian reports that a change of the UK Prime Minister could occur as early as July 2026.

Recommendation

  • Trade: Short (SELL) on GBPUSD at market price
  • Target Price (Take Profit; TP): 1.30900 (TP1), 1.30000 (TP2)
  • Stop Loss (SL): 1.33090

Source: xStation5

Opinion

The GBP/USD rate is rebounding slightly as the dollar (specifically the dollar index, USDIDX) corrects across the broader market after breaking out to a 13-month high. Technically, however, we are far from breaking the downward trend on GBPUSD. Even after the recent bounce, the price has been moving below the 10-day exponential moving average (EMA10; yellow) for 9 days. Furthermore, the cascade of the remaining EMAs (longer over shorter: EMA100 over EMA30, and EMA30 over EMA10) signals a clear downtrend, the reversal of which would require a series of bullish turnarounds. The chances of a strictly pro-pound turnaround remain slim. The British currency is primarily weighed down by a period of political uncertainty and the ongoing leadership transition within the ruling Labour Party following Prime Minister Starmer’s resignation.

The Guardian reported that according to preliminary internal party plans, Burnham could assume the office of Prime Minister as early as July 17. However, the anticipation—especially regarding the appointments of key cabinet members such as the Chancellor—should continue to test the pound. On the dollar side, we see a persistently hawkish Fed narrative, an increase in core PCE inflation to 3.4%, and a Q1 2026 GDP revision from 1.6% to 2.1%. The backdrop of a gathering momentum in the US economy alongside elevated inflation contrasts sharply with stagflationary tendencies in the UK. This divergence should extend the current trend on GBPUSD and the UK/US 10-year bond yield spread, until potential wage effects emerge from the recent UK energy shock, which could force the Bank of England into a more hawkish monetary policy stance. However, UK policy is already restrictive, which limits the potential for a sharp pivot.

Methodology

This recommendation was prepared based on a technical analysis of the GBPUSD chart and a fundamental analysis of the economies in question (monetary policy in the United Kingdom and the United States). The directional bias of the recommendation was determined using moving averages and market expectations regarding central bank policies. Take Profit and Stop Loss levels were established using Fibonacci retracements and price action:

  • TP1 and TP2 are located at the nearest support levels from November 2025.
  • SL is placed halfway between the EMA10 and EMA30, as well as between the 23.6% and 38.2% Fibo levels.
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Euro steadies against Canadian Dollar after paring recent losses

  • EUR/CAD recovers its daily losses on ECB rate hike bets.
  • ECB policymaker Isabel Schnabel stated that monetary tightening is not over.
  • The Canadian Dollar may struggle as the BoC is expected to hold interest rates steady all year.

EUR/CAD remains flat after paring intraday losses, trading around 1.6150 during the European hours on Friday. The currency cross receives support as the Euro (EUR) gains ground following European Central Bank (ECB) policymaker Isabel Schnabel’s comments, reiterating on Thursday that the central bank’s monetary tightening cycle is not yet over.

While acknowledging that short-term economic conditions have outpaced expectations, Schnabel warned that a recent ceasefire should not prompt policymakers to lower their guard. She emphasized that, from today’s perspective, further interest rate hikes will be necessary to steer inflation back down to the ECB’s 2% medium-term target.

However, ECB President Christine Lagarde noted earlier this week that the central bank can avoid aggressive policy reactions to geopolitical spillovers from the Middle East. While Lagarde acknowledged that the Eurozone’s inflation shock is too significant to ignore, she emphasized it remains insufficient to drive up long-term inflation.

The EUR/CAD cross may further advance as the commodity-linked Canadian Dollar’s (CAD) upside could be capped as the Bank of Canada (BoC) is expected to hold interest rates steady for the remainder of the year.

According to the minutes from the BoC’s policy meeting, the governing council agreed to keep its monetary policy nimble to respond to the simultaneous risks of new US trade restrictions and volatile energy prices. Reflecting this cautious outlook, Reuters data shows traders have sharply scaled back expectations for further tightening, now pricing in just 17 basis points by December, down from 60 basis points last month.

Euro Price Today

The table below shows the percentage change of Euro (EUR) against listed major currencies today. Euro was the strongest against the Australian Dollar.

USDEURGBPJPYCADAUDNZDCHF
USD-0.06%-0.03%-0.08%-0.05%0.26%0.05%-0.16%
EUR0.06%0.01%-0.02%0.03%0.31%0.07%-0.10%
GBP0.03%-0.01%-0.02%-0.02%0.30%0.08%-0.12%
JPY0.08%0.02%0.02%0.02%0.32%0.08%-0.09%
CAD0.05%-0.03%0.02%-0.02%0.30%0.06%-0.13%
AUD-0.26%-0.31%-0.30%-0.32%-0.30%-0.22%-0.42%
NZD-0.05%-0.07%-0.08%-0.08%-0.06%0.22%-0.18%
CHF0.16%0.10%0.12%0.09%0.13%0.42%0.18%

The heat map shows percentage changes of major currencies against each other. The base currency is picked from the left column, while the quote currency is picked from the top row. For example, if you pick the Euro from the left column and move along the horizontal line to the US Dollar, the percentage change displayed in the box will represent EUR (base)/USD (quote).

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GBP/USD Price – Struggles to build on move beyond 1.3200 amid bearish setup

  • GBP/USD attracts some buyers for the second straight day amid a mildly softer US Dollar.
  • The UK political crisis holds back GBP bulls from placing fresh bets and caps spot prices.
  • The bearish technical setup suggests that a further move up is more likely to be sold into.

The GBP/USD pair sticks to its positive bias for the second straight day, though it lacks bullish conviction and trades just above the 1.3200 mark during the early European session on Friday. The US Dollar (USD) remains depressed below its highest level since May 2025, touched on Thursday, and acts as a tailwind for spot prices.

However, the UK political crisis holds back traders from placing aggressive bullish bets around the British Pound (GBP) and caps the upside for the GBP/USD pair. Furthermore, a bearish technical setup warrants caution before positioning for any meaningful recovery from the 1.3140 area, or the lowest since November, set on Wednesday.

Against the backdrop of the recent repeated failures near the 200-period Simple Moving Average (SMA) on the 4-hour chart, this week’s break below the 1.3300 mark was seen as a key trigger for the GBP/USD bears. Moreover, the Relative Strength Index (RSI) is at 47, suggesting consolidative conditions rather than clear trend strength.

However, the Moving Average Convergence Divergence (MACD) indicator shows the MACD line modestly above the signal line and hovering around zero. This hints at tentative bullish momentum that is not yet strong enough to challenge the GBP/USD pair’s dominant downtrend witnessed over the past two months or so.

On the topside, initial resistance is located at the 200-period SMA at 1.3384, and spot prices would need a sustained break above this level to ease the broader bearish bias and open the way for a more constructive recovery phase. On the downside, intraday setbacks are likely to be driven more by price action than by clearly defined structural supports.

Meanwhile, traders will be watching the recent lows around the mid-1.3100s as a provisional near-term floor for the GBP/USD pair until fresh technical levels emerge.

(The technical analysis of this story was written with the help of an AI tool.)

GBP/USD 4-hour chart

Chart Analysis GBP/USD

US Dollar Price Today

The table below shows the percentage change of US Dollar (USD) against listed major currencies today. US Dollar was the strongest against the Australian Dollar.

USDEURGBPJPYCADAUDNZDCHF
USD-0.14%-0.07%-0.10%-0.04%0.29%0.04%-0.22%
EUR0.14%0.07%0.06%0.13%0.44%0.16%-0.07%
GBP0.07%-0.07%0.00%0.06%0.38%0.12%-0.13%
JPY0.10%-0.06%0.00%0.06%0.39%0.11%-0.12%
CAD0.04%-0.13%-0.06%-0.06%0.33%0.05%-0.20%
AUD-0.29%-0.44%-0.38%-0.39%-0.33%-0.26%-0.52%
NZD-0.04%-0.16%-0.12%-0.11%-0.05%0.26%-0.24%
CHF0.22%0.07%0.13%0.12%0.20%0.52%0.24%

The heat map shows percentage changes of major currencies against each other. The base currency is picked from the left column, while the quote currency is picked from the top row. For example, if you pick the US Dollar from the left column and move along the horizontal line to the Japanese Yen, the percentage change displayed in the box will represent USD (base)/JPY (quote).

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Swiss Franc declines as Fed hike bets lift US Dollar

  • USD/CHF gains ground amid rising expectations of a Fed rate hike.
  • The CME FedWatch tool shows that markets are pricing in a 63.4% probability of an interest rate increase in September.
  • Swiss investor sentiment plunged to -25.0 in June from -11.1 in May, remaining deeply in negative territory.

USD/CHF gains ground after registering nearly 0.30%, trading around 0.8100 during the Asian hours on Friday. The pair rises as the US Dollar (USD) finds support from growing expectations of a Federal Reserve (Fed) rate hike. According to the CME FedWatch tool, markets have priced in a 63.4% probability that the Fed will raise interest rates during its September 15–16 meeting.

This hawkish sentiment is fueled by accelerating inflation data, with the headline Personal Consumption Expenditures (PCE) Price Index climbing to 4.1% year-over-year in May, up from 3.3% in April. This surge, the first time the headline figure has breached 4.0% in three years, is largely attributed to rising energy prices stemming from the Middle East conflict, keeping the prospect of further rate increases this year firmly on the table.

Furthermore, the Fed’s preferred inflation gauge, the core PCE index, rose to 3.4% year-over-year, up from 3.3%. This represents the highest annual core reading since October 2023.

Swiss investor sentiment worsened significantly in June 2026, dropping to -25.0 from -11.1 in May and remaining deeply negative. According to the latest UBS & CFA Society Switzerland survey, the economic expectations index experienced a sharp month-on-month decline of 13.9 points.

The Swiss National Bank (SNB) elected to keep its benchmark policy rate unchanged at 0% for the fourth consecutive meeting, reiterating that its current monetary stance supports both economic growth and price stability. However, the central bank also raised its inflation forecasts and reminded markets that it remains fully prepared to step into the foreign exchange markets if currency pressures demand it.

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EUR/USD Price – Holds above mid-1.1300s amid Hormuz risks, bearish setup

  • EUR/USD struggles to lure buyers on Friday as Hormuz risks support the safe-haven USD.
  • Receding Fed rate hike bets keep a lid on the USD appreciation and limit losses for the pair.
  • The bearish technical setup suggests that the path of least resistance is to the downside.

The EUR/USD pair struggles to capitalize on the previous day’s modest recovery gains and oscillates in a narrow band during the Asian session on Friday. Spot prices, however, hold above mid-1.1300s and the lowest level since May 2025, set on Thursday, warranting some caution for bearish traders.

Reports that Iran’s Islamic Revolutionary Guard Corps (IRGC) attacked a Singapore-flagged cargo ship in the Strait of Hormuz reignite worries about the sustainability of an interim US-Iran peace deal and support the safe-haven US Dollar (USD). This, in turn, is seen as a key factor acting as a headwind for the EUR/USD pair.

Meanwhile, traders trimmed their bets for interest rate hikes by the US Federal Reserve (Fed) this year amid expectations that inflation likely peaked last month or is ‌close to doing so in the face of the recent fall in Crude Oil prices. This caps the upside for the USD and helps limit any further downside for the EUR/USD pair.

The recent repeated failures to find acceptance above the 100-period Simple Moving Average (SMA) on the 4-hour chart and the EUR/USD pair’s inability to gain any meaningful traction favor bears. Moreover, the Relative Strength Index (RSI) near 42 hints at a gradual recovery from oversold conditions rather than a bullish shift.

Meanwhile, the Moving Average Convergence Divergence (MACD) has now turned modestly positive, though the EUR/USD pair remains structurally pressured in the near-term. This, in turn, suggests that any meaningful recovery attempt might still be seen as a selling opportunity and runs the risk of fizzling out rather quickly.

Immediate resistance is located at the 1.1440 region, and a break above could lift the EUR/USD pair back to the 100-period SMA at 1.1514. A move beyond this hurdle is needed to ease the current bearish tone and open the way for a more meaningful correction higher. Until then, the pair seems vulnerable to test fresh lows.

(The technical analysis of this story was written with the help of an AI tool.)

EUR/USD 4-hour chart

Chart Analysis EUR/USD

US Dollar Price Today

The table below shows the percentage change of US Dollar (USD) against listed major currencies today. US Dollar was the strongest against the Australian Dollar.

USDEURGBPJPYCADAUDNZDCHF
USD-0.02%-0.05%-0.10%-0.06%0.25%0.14%-0.08%
EUR0.02%-0.05%-0.06%-0.02%0.27%0.12%-0.06%
GBP0.05%0.05%0.00%0.00%0.32%0.19%-0.02%
JPY0.10%0.06%0.00%0.02%0.33%0.19%-0.01%
CAD0.06%0.02%0.00%-0.02%0.31%0.16%-0.05%
AUD-0.25%-0.27%-0.32%-0.33%-0.31%-0.13%-0.35%
NZD-0.14%-0.12%-0.19%-0.19%-0.16%0.13%-0.20%
CHF0.08%0.06%0.02%0.00%0.05%0.35%0.20%

The heat map shows percentage changes of major currencies against each other. The base currency is picked from the left column, while the quote currency is picked from the top row. For example, if you pick the US Dollar from the left column and move along the horizontal line to the Japanese Yen, the percentage change displayed in the box will represent USD (base)/JPY (quote).

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Australian Dollar drops to fresh lows since April vs USD amid global risk-off impulse

  • AUD/USD meets with a fresh supply on Friday, though the RBA’s hawkish tilt limits losses.
  • Hormuz risks and Fed rate hike bets revive USD demand, exerting pressure on spot prices.
  • Traders now look to the US Consumer Sentiment Index and Fedspeak for a fresh impetus.

The AUD/USD pair attracts fresh sellers following the previous day’s modest gains and drops to a fresh low since early April during the Asian session on Friday. Spot prices, however, recover a few pips in the last hour and currently trade just below the 0.6900 mark, still down over 0.25% for the day.

According to the third and final reading published by the US Bureau of Economic Analysis on Thursday, the economy grew at an annualized rate of 2.1% in the first quarter of 2026 compared to the second estimate of 1.6% rise. Adding to this, the US Personal Consumption Expenditures (PCE) Price Index highlighted persistent inflationary pressures, keeping an interest rate hike by the US Federal Reserve (Fed) this year firmly on the table. Apart from this, the cautious market mood helps the safe-haven US Dollar (USD) stall its corrective pullback from the highest level since May 2025, touched on Thursday, and exerts downward pressure on the AUD/USD pair.

Reports suggested that Iran’s Islamic Revolutionary Guard Corps (IRGC) attacked a Singapore-flagged cargo ship in the Strait of Hormuz. The latest development reignites worries about the sustainability of the preliminary US-Iran peace deal. Apart from this, the recent tech-driven selloff in the equity markets has triggered global risk aversion, which is seen as another factor behind the Greenback’s relative outperformance against the perceived riskier Australian Dollar (AUD). That said, expectations that the Reserve Bank of Australia (RBA) will stick to its hawkish stance hold back bearish traders from placing aggressive bets around the AUD/USD pair.

Traders now look forward to the release of the revived University of Michigan US Consumer Sentiment Index, which, along with Fedspeak, might influence the USD price dynamics. The focus will then shift to RBA Governor  Michele Bullock’s speech on Sunday, which should provide a fresh impetus to the AUD/USD pair at the start of a new week. Nevertheless, spot prices remain on track to register heavy weekly losses, also marking the second straight week of a negative move.

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EUR/JPY Price – Slips below 184.00 due to bearish near-term bias

  • EUR/JPY is bearish, trading below its nine-period and 50-period EMAs.
  • The 14-day Relative Strength Index at 38 signals continuing downside momentum, not an oversold reversal.
  • Spot above 183.81 VWAP means buyers control the EUR/JPY cross in intraday trading.

EUR/JPY inches lower after registering minor gains in the previous day, trading around 183.90 during the Asian hours on Friday. The currency cross maintains a bearish near-term bias as it holds below both the nine-period and 50-period Exponential Moving Averages (EMAs) at 184.38 and 184.91, respectively.

The EUR/JPY cross is remaining within the symmetrical triangle, suggesting market indecision and an impending breakout as energy builds, while the 14-day Relative Strength Index (RSI) has eased toward 38, hinting at lingering downside pressure rather than a decisive oversold reversal.

However, the session Volume-Weighted Average Price (VWAP) represents the true average price paid for a stock or asset throughout the day, weighted by volume. Because the spot price is higher than the VWAP of 183.81, it means buyers are firmly in control and are willing to pay a premium to acquire the EUR/JPY cross.

In context with the symmetrical triangle, volatility is shrinking. Think of it like a compressed spring; the market is resting and storing energy for a major breakout. Because the price is trapped between two converging trendlines, momentum indicators like VWAP lose their directional edge until a breakout occurs.

The initial support is aligned at the lower boundary of the symmetrical triangle around 183.40. Further declines would expose the four-month low of 181.87, recorded on March 16, followed by the six-month low of 180.81.

On the upside, primary resistance is seen at the nine-period EMA at 184.38, followed by the 50-period EMA at 184.91; a sustained break above these levels would soften the bearish tone and expose the upper boundary of the symmetrical triangle around 186.00. Further advances would support the EUR/JPY cross to test the all-time high of 187.95.

Chart Analysis EUR/JPY
EUR/JPY: Daily Chart

Euro Price Today

The table below shows the percentage change of Euro (EUR) against listed major currencies today. Euro was the weakest against the Swiss Franc.

USDEURGBPJPYCADAUDNZDCHF
USD-0.03%-0.05%-0.11%-0.06%0.33%0.14%-0.17%
EUR0.03%-0.03%-0.06%-0.01%0.36%0.14%-0.13%
GBP0.05%0.03%-0.04%-0.01%0.39%0.19%-0.11%
JPY0.11%0.06%0.04%0.05%0.43%0.22%-0.06%
CAD0.06%0.00%0.00%-0.05%0.39%0.16%-0.13%
AUD-0.33%-0.36%-0.39%-0.43%-0.39%-0.20%-0.48%
NZD-0.14%-0.14%-0.19%-0.22%-0.16%0.20%-0.29%
CHF0.17%0.13%0.11%0.06%0.13%0.48%0.29%

The heat map shows percentage changes of major currencies against each other. The base currency is picked from the left column, while the quote currency is picked from the top row. For example, if you pick the Euro from the left column and move along the horizontal line to the US Dollar, the percentage change displayed in the box will represent EUR (base)/USD (quote).