Key Points
- GBP/USD drops to 1.35, the lowest level since January 2026
- Pair remains up 0.33% over four weeks and 6.42% over the past 12 months
GBP/USD fell to 1.35, marking its lowest level since January 2026, as short-term selling pressure weighed on sterling. The pair currently trades at 1.34840 (-0.00092, -0.07%), reflecting cautious positioning in early European trade.
Despite the latest dip, the broader performance remains constructive. Over the past four weeks, the British pound has gained 0.33%, and over the last 12 months, it has risen 6.42% against the US dollar.
This suggests that the recent decline is more of a correction within a longer-term recovery trend rather than a structural reversal.
The move lower comes amid a firmer dollar tone and ongoing reassessment of global interest rate expectations, particularly as US economic data has remained resilient.
Dollar Strength in Focus
Sterling’s retreat aligns with renewed dollar firmness following robust US economic data. Stronger labour market readings and resilient activity indicators have tempered expectations for rapid Federal Reserve easing, lending support to the greenback.
At the same time, markets continue to monitor the Bank of England’s policy stance. If UK inflation moderates more quickly than expected, rate expectations may soften, which could limit sterling’s upside in the near term.
Technical Analysis
GBPUSD is trading near 1.3484, slipping slightly on the session and extending its pullback from the recent peak at 1.3869.
The daily chart shows that momentum has clearly cooled after the sharp January rally, with price now drifting lower and testing short-term support.
The pair is trading beneath the 5-day (1.3565) and 10-day (1.3602) moving averages, both of which have turned lower, while the 20-day (1.3651) and 30-day (1.3577) averages are beginning to flatten.
This alignment suggests a short-term bearish bias, although the broader structure remains constructive as long as price holds above the late-December breakout zone.
Immediate support is seen around 1.3400, followed by the 1.3300–1.3350 region, which previously acted as resistance before the January breakout.
On the upside, resistance now sits in the 1.3550–1.3650 band, where multiple moving averages cluster. A recovery above this area would signal renewed bullish intent and reopen the path toward 1.3800. Conversely, a decisive break below 1.3400 could accelerate downside momentum in the near term.
Cautious Outlook
In the short term, GBP/USD may continue to test support around 1.3450–1.3500. A sustained hold above this zone would suggest consolidation within the broader 12-month uptrend, especially given the 6.42% year-on-year gain.
However, a clear break lower could trigger a deeper retracement toward 1.3300, particularly if US data continues to outperform.
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