- The GBP/USD pair's upward trajectory has come to a relative halt, having been on the cusp of the psychological resistance at 1.3000, with gains reaching a peak of 1.2988, the highest level for the pair in four months.
- According to trading, the GBP/USD exchange rate declined against the US dollar after US inflation fell below expectations.
- However, the weakness is expected to be limited, and the upward trend will remain strong.
The US Dollar Is Affected by Weaker Inflation Figures
According to Forex market trading, the US dollar rose in tandem with news of US inflation for February declining to 0.2% month-on-month from 0.5%, surpassing expectations of 0.3%. Officially announced, the annual rate fell to 3.1% from 3.3%, also lower than the consensus expectations of 3.2%.
Overall, the Forex market guide suggests that weak US inflation would increase the chances of the Federal Reserve cutting interest rates further, which would negatively impact the US dollar. However, the recent period has witnessed sharp volatility for the US dollar and the global currency market in general, so we are not surprised by the unexpected rise in the dollar.
The decline in inflation will alleviate concerns about the US economy heading towards a bout of stagflation, which is, to some extent, supportive of the currency. Furthermore, the US Dollar Index performance had declined during 2025 amid signs of a slowing US economy and expectations of rising inflation with increased import costs due to tariffs. Obviously, high inflation and declining growth create a stagflation environment that rarely supports currencies.
However, the US dollar is also benefiting from the sense that concerns about tariffs are fully understood, and that headlines and threats from the White House are losing their grip on the currency. However, the decline in the GBP/USD pair remains shallow, and the trend of least resistance remains upward, with the psychological resistance level of 1.30 emerging.
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Trading Tips:
The GBP/USD upward trend is at an important stage for continuation or exposure to profit-taking selloffs, so caution is advised.
Will the GBP/USD reach the 1.30 high?
According to Forex market experts, the situation for the GBP/USD pair will become more difficult at this important 1.30 level. The GBP/USD exchange rate is primarily dependent on the EUR/GBP and EUR/USD exchange rates these days (the EUR/GBP pair is experiencing a slight increase simply because its rise has been slower than the EUR/USD pair's). However, the slowdown in UK economic growth, caused by fiscal measures, is likely to be sufficient to encourage hedging of any long-term exposure to the British pound, as the GBP/USD exchange rate approaches or breaks the 1.30 level.
Technical Analysis for the GBP/USD pair today:
According to daily chart trading above, the general trend for the GBP/USD currency pair remains upward. As we mentioned before, the psychological resistance of 1.3000 will remain the most important for the strength of the bulls' control of the trend, and at the same time, it will be sufficient to push technical indicators towards strong overbought levels, led by the Relative Strength Index and the MACD indicator. In contrast, there will be no exit from the current upward channel without moving towards and below the support level of 1.2740. furthermore, the GBP/USD performance will remain dependent on investor sentiment towards risk appetite and the reaction to signals from global central bank officials. So far, the GBP has avoided the reaction from US tariffs.
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