GBP/USD is currently steady at 1.3430, facing resistance at the nine-day EMA of 1.3446. The 14-day RSI is at 51, which indicates that the momentum is balanced. Support is found at the 50-day EMA at 1.3388, showing a general upward trend since the pair is trading above it. However, the nine-day EMA hints at a possible slight decline if it isn’t broken.

Key Price Levels and Projections

If the price breaks above this resistance, it could potentially reach the three-month high of 1.3562. Further increases could push it toward the six-month high of 1.3726 and even 1.3788, which is the highest level since October 2021. On the other hand, if GBP/USD closes below the 50-day EMA, it may drop to the eight-month low of 1.3010. Recently, the British Pound declined by 0.05% against the US Dollar and was the weakest against the Swiss Franc with a 0.06% drop. The heat map reflects the percentage changes among major currencies. GBP/USD showed little change, indicating a stable trading session. Throughout this period, the Pound’s weakness was most notable against the Swiss Franc. Forex Analyst Akhtar Faruqui from New Delhi, India, contributed to this analysis.

Economic Weakness and Global Factors

Reflecting back on 2025, the pound was around 1.3430, caught between important moving averages. The balanced momentum at that time, with an RSI near 51, pointed to a market at a crossroads. That period of calm has clearly ended as we enter the new year. Support at the 50-day EMA of 1.3388 ultimately broke down as concerns about the UK economy grew towards the end of last year. Recent data revealed a technical recession in the UK during the second half of 2025, with Q4 GDP contracting by 0.2%. This economic weakness is now driving the pair. Meanwhile, the US dollar remains strong, boosted by a robust labor market that saw over 210,000 jobs added last month. US inflation at 3.1% is higher than the UK’s 2.8%, leaving the Federal Reserve less inclined to cut rates compared to the Bank of England. This difference in policy is putting pressure on the pound. Looking ahead, we expect continued pressure on GBP/USD, which is currently trading near 1.3150. Traders may want to view any rallies toward the 1.3250 level as chances to open short positions. Buying put options could also be an effective strategy to guard against or profit from a potential decline toward the 1.3010 low that we monitored last year. Create your live VT Markets account and start trading now.

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