Pound to Dollar FX Outlook: GBP/USD Technicals are "Neutral/Bearish"

April 7, 2025 - Written by Frank Davies

STORY LINK Pound to Dollar FX Outlook: GBP/USD Technicals are "Neutral/Bearish"

"GBPUSD short-term technicals are neutral/bearish according to strategists at Scotiabank.

"GBPUSD’s sharp reversal of last week’s rally delivered a break of its one-month range and a push to fresh local lows in the mid/lower-1.28s. The RSI has drifted below 50, in bearish territory, and there doesn’t appear to be any clear support ahead of the lower 1.27s."

The Pound to US Dollar (GBP/USD) exchange rate lost ground at the start of the week as uncertainty surrounding trade negotiations between the UK and US spooked investors.

At the time of writing, GBP/USD was trending near $1.2879—broadly flat compared to the opening levels on Monday.

The Pound (GBP) failed to find much direction on Monday amid renewed doubts over the pace and success of trade talks with the United States.

Despite continued diplomatic efforts by Prime Minister Keir Starmer’s government, the UK’s potential response to Trump’s new tariffs has stirred concern among investors that a resolution may not be close.

This anxiety, combined with the Pound’s sensitivity to global risk sentiment, caused Sterling to underperform against several major currencies.

The US Dollar (USD) experienced mixed movement as investors weighed the broader impact of Trump’s economic stance on the US outlook.

Mounting fears that the US economy could slip into a recession—triggered by aggressive trade measures—have prompted some major financial analysts to downgrade their growth forecasts.

While Trump’s initial tariff moves were widely viewed as strategic posturing, the persistence of the policy, despite market volatility, has alarmed many observers.

As a result, USD traders are reevaluating expectations for the US economy and the future trajectory of Federal Reserve monetary policy.

According to CME’s FedWatch data, market odds for a rate cut in May have jumped from 14% to 50% in the past week.

Looking ahead, the Pound US Dollar exchange rate may continue to experience turbulent trading in the near term as markets digest the broader implications of US trade policy.

Should global sentiment continue to sour, Sterling could remain under pressure, particularly if investors continue to favour safer assets.

However, USD gains may be tempered if recession risks keep growing, particularly if expectations for imminent Fed rate cuts intensify.

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TAGS: Pound Dollar Forecasts