GBP/USD Forecast: Pound Sterling surges, Shell banned from attempting BP takeover for six months

GBP/USD extended its rally and touched its highest level since October 2021 above 1.3750 on Thursday. The heavy selling pressure surrounding the US Dollar (USD), on renewed concerns over the Federal Reserve losing its independence, could allow the pair to continue to push higher despite overbought conditions.

The Wall Street Journal (WSJ) reported late Wednesday that United States President Donald Trump was planning to announce his candidate for the next Chairman of the Federal Reserve (Fed) early, by September or October, to undermine Fed Chairman Jerome Powell. The news outlet claimed that Trump is evaluating Kevin Hassett’s, Director of the National Economic Council, and Treasury Secretary Scott Bessent’s commitment to lower interest rates as they are among the names that could potentially replace Powell. Read more…

GBP/USD outlook: Cable keeps firm tone, further gains likely after consolidation

Cable remains steady and holds within a narrow consolidation just below new multi-month high (1.3648), posted on Tuesday, following strong bullish acceleration in past two days.

Revived risk appetite on growing confidence in still fragile ceasefire in the Middle East, continues to underpin near-term action, as markets await more details from Fed Powell’s second day of testimony to Senate Banking committee. Read more…

• The Euro trades lower against the British Pound on Tuesday, snapping a steady winning streak that began earlier in June.
• The cross is edging lower, quoted around 0.8533 during the American trading hours, down about 0.40% on the day.
• RSI has eased from overbought territory and is drifting lower at 59.83, while the MACD remains slightly positive but shows signs of flattening momentum.

The Euro (EUR) is slipping against the Pound today, putting the brakes on a solid run that saw buyers firmly in control for nearly two weeks. The EUR/GBP cross is edging lower, trading around 0.8527 during the American trading hours, down about 0.40% on the day.

Zooming in on the daily chart, the broader trend structure remains constructive despite today’s short pullback. EUR/GBP continues to trace a well-respected rising channel that has guided price action since late January. Within this structure, buyers have consistently stepped in near the lower boundary and the 21-day EMA, which now sits close to 0.8496, cushioning dips.

However, the pair is encountering resistance near the 0.8550 psychological level, which aligns with the 50% Fibonacci retracement of the April peak to the May low. This area, overlapping with the channel’s midline, is drawing profit-taking and testing the strength of the recent bullish momentum.

Momentum signals suggest caution in the near term. The Relative Strength Index (RSI) has retreated from overbought levels and is currently at 59.83, implying the recent bullish push may be cooling off. Meanwhile, the MACD histogram remains in positive territory but hints at flattening momentum, signaling that the rally could stall without fresh catalysts.

A sustained daily close above 0.8600 would validate the bullish case and open the path toward 0.8740 — the April high and channel ceiling. Conversely, if the pullback deepens, the 21-day EMA near 0.8496 provides immediate support, followed by stronger buying interest around the 38.2% Fib at 0.8504 and the lower channel boundary near 0.8400.

• The GBP/USD outlook is extremely bullish after the dollar loses further due to Trump’s criticism of the Fed.
• Iran-Israel ceasefire continues to underpin the global risk sentiment.
• Markets are now eyeing the Q1 GDP and Core PCE Index data from the US.

The British pound extended its bullish momentum for the fourth consecutive session on Thursday, pushing the price to a fresh 41-month top near mid-1.3700. The rally stems from improving global risk sentiment and pressure on the US dollar driven by tension in Washington.

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The greenback is experiencing a broader sell-off after President Trump renewed his criticism of the Federal Reserve’s independence. Trump labeled Fed Chair Powell as “terrible” after his testimony before Congress, where he reiterated the data dependence and showed no urgency to lower the rates. The US President also hinted at replacing Powell as soon as this summer. The Dollar Index plunged below 97.50 as markets interpreted Trump’s threat as a political intervention with the central bank.

While the US side faces central bank politics and mixed economic data, the British pound shows resilience. Domestic concerns about a cooling labor market and softer inflation hopes are striking at the pound’s strength. A British Chamber of Commerce survey revealed that around one-third of SMEs plan to cut jobs due to rising National Insurance costs. BoE Governor Bailey also pointed out the softening of the labor market during his testimony earlier this week.

Nevertheless, the markets remain primarily focused on US dynamics and broader risk sentiment. The ceasefire between Iran and Israel has lifted the risk appetite and shifted capital flows off the US dollar. Traders are now eyeing today’s US Q1 GDP and Friday’s US Core PCE Index report. Softer-than-expected data may increase the odds of a September rate cut, which will further weaken the US dollar.

GBP/USD Technical Outlook: Bulls Aim for 1.4000

The 4-hour chart of the GBP/USD reveals a strong bullish trend as the price lies well above the key SMAs. The pair broke the resistance at 1.3635 with a strong push towards 1.3750. The price is building the case to test the 1.4000 psychological mark.

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On the other hand, the pair may experience profit-taking as it has overextended, and the RSI indicates an extreme overbought condition near the 80.0 level. The pair may test the resistance-turned-support at 1.3635 before resuming the uptrend.

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• USD/JPY attracts heavy selling and is pressured by a combination of negative factors.
• Concerns over the Fed’s independence weigh on the USD and lift the safe-haven JPY.
• The divergent Fed-BoJ policy expectations contribute to the steep intraday decline.

The USD/JPY pair resumes this week’s sharp retracement slide from the 146.00 mark, or its highest level since May 13, and dives to a one-and-half-week low during the first half of the European session on Thursday. Spot prices slip below the 144.00 mark in the last hour and seem vulnerable to weaken further amid a bearish fundamental backdrop.

US President Donald Trump escalated his criticism of Federal Reserve Chair Jerome Powell for not cutting rates and floated the idea of firing him. Powell, testifying before Congress for the second day on Wednesday, acknowledged that the recent inflation reading had been more moderate, but he warned that new tariffs could change that. Powell reiterated that the central bank is well-positioned to wait to cut interest rates until they have a better handle on the impact of Trump’s trade policies on consumer prices.

Meanwhile, reports suggest that Trump was considering naming Powell’s successor by September or October, stoking concerns over the central bank’s independence. When asked if he is interviewing candidates to replace Powell, Trump said he has three or four people in mind as contenders for the top Fed job. This, along with bets that the US central bank could resume its rate-cutting cycle as soon as July, drags the US Dollar (USD) to its lowest level since March 2022 and is seen weighing heavily on the USD/JPY pair.

Moreover, traders have fully priced in that the Fed will lower rates by at least 50 basis points before the end of this year. In contrast, the Bank of Japan – although has been hesitant to raise interest rates – is still expected to stay on the path of monetary policy normalization as inflation persistently exceeds its target. Japan’s core inflation has remained well above the BoJ’s 2% target for well over three years and rose to a more than two-year high in May. Furthermore, Japan’s Corporate Services Producer Price Index – a leading indicator of consumer price inflation – has been trending above the 3% YoY rate for several consecutive months.

The divergent Fed-BoJ policy expectations turn out to be another factor exerting downward pressure on the USD/JPY pair and validate the near-term negative outlook. Traders now look forward to the US economic docket – featuring the final Q1 GDP print, the usual Weekly Initial Jobless Claims, Durable Goods Orders, and Pending Home Sales. Apart from this, speeches from influential FOMC members could provide some impetus to the pair ahead of the Tokyo CPI and the US Personal Consumption Expenditure (PCE) Price Index on Friday. Nevertheless, the aforementioned factors suggest that the path of least resistance for spot prices is to the downside.

USD/JPY 4-hour chart

Technical Outlook

The overnight failure ahead of the 146.00 mark and a subsequent break below the 144.70-144.65 area, or the 200-period Simple Moving Average (SMA) on the 4-hour chart, validates the negative outlook for the USD/JPY pair. Moreover, oscillators on hourly/daily charts have just started gaining negative traction and back the case for a slide towards intermediate support near the 143.70-143.65 region en route to sub-143.00 levels.

On the flip side, the 200-SMA support breakpoint, around the 144.65-144.70 zone, now seems to act as an immediate hurdle ahead of the 145.00 psychological mark and the 145.25-145.35 static barrier. A sustained strength beyond the latter could allow the USD/JPY pair to make a fresh attempt to conquer the 146.00 mark. The said handle might now act as a pivotal point, which if cleared could shift the near-term bias in favor of bulls and pave the way for additional near-term gains.

The GBPCHF affected by stochastic rally to the overbought level, forming some bullish correctional waves, recording 1.1015 level, but the main stability within the bearish channel’s levels, which represents 1.1055 level for the extension of the extra main resistance for the stability of the moving average 55 above the current trading, these factors makes us wait for preferring the bearish bias domination, which might target 1.0975 and 1.0955.

Note that the price rally above the bearish channel’s resistance and provides a positive close, will confirm its move to the bullish track, to begin targeting several positive stations by reaching 1.1095 initially.

The expected trading range for today is between 1.0955 and 1.1040

Trend forecast: Bearish