Key Points
- GBP/USD rebounded to 1.2942, erasing early losses after testing a low of 1.2913.
- Market uncertainty remains as the U.K. holds back on retaliatory measures against U.S. steel and aluminium tariffs.
The British pound remained resilient on Wednesday, recovering from early declines as markets assessed the impact of U.S. President Donald Trump’s 25% tariff on steel and aluminium imports, including those from the U.K..
After dipping to 1.2913, GBP/USD rebounded to 1.2942, reflecting a cautious but steady sentiment. The pair reached an intraday high of 1.2965 before paring gains. The slight recovery suggests that traders are not yet pricing in immediate economic retaliation from the U.K.
U.K. Business Secretary Jonathan Reynolds expressed disappointment over the tariffs but confirmed that Britain will prioritise ongoing trade negotiations with the U.S. rather than retaliatory measures.
The euro also strengthened against the pound, with EUR/GBP rising 0.1% to 0.8440, as investors sought relative safety in the euro amid heightened uncertainty.
Technical Analysis
The GBP/USD pair is trading around 1.29421, showing a 0.02% gain on the session. The price reached a high of 1.29546 and a low of 1.29135, with recent movements indicating a mild recovery after a brief pullback. The moving averages (5, 10, 30) suggest ongoing bullish momentum, while the MACD shows signs of a potential continuation to the upside.
Picture: GBP/USD holds gains near 1.2942, eyeing further upside, as seen on the VT Markets app
If bullish momentum continues, resistance is seen at 1.29657, and a break above could push GBP/USD toward the 1.2980-1.3000 region. On the downside, support is near 1.2910, and a break below could lead to a retest of 1.2880. Traders should monitor UK economic data, U.S. inflation figures, and central bank rhetoric, as they will play a key role in the pair’s next move.
Despite trade tensions, technical indicators suggest GBP/USD remains stable, with the 50-day moving average providing support and MACD showing a neutral momentum shift. Traders now await further signals on potential tariff adjustments or trade policy shifts from both Washington and London.
