Pound Sterling (GBP) has experienced a slight decline, reflecting the overall movement of the USD. The UK government has opted against immediate retaliation to US steel tariffs, choosing instead to initiate broader trade discussions.
Currently, GBP/USD, referred to as “Cable,” is consolidating near Fibonacci retracement resistance in the low 1.29 range. Short-term trend momentum remains positive, with expected support levels at 1.2875/80 and a breakout trigger resistance at 1.2975.
Impact Of Trade Discussions
This recent decline in Sterling is not an isolated shift, but rather an extension of broader movements in the US Dollar. With the UK refraining from an immediate response to American trade measures, the focus has now turned towards negotiations that could shape economic ties for the foreseeable future. This approach tempers short-term volatility but leaves room for later adjustments if discussions take a different turn. While this policy decision does not create immediate market shocks, it does introduce a degree of uncertainty that traders must keep in mind.
At present, GBP/USD hovers near a known resistance level defined by Fibonacci retracement, which presents a technical hurdle around the lower 1.29 region. Momentum indicators suggest that upward movement still has support behind it, although the strength of this remains subject to shifting conditions. Key support has formed in the 1.2875/80 zone, a level that traders would be wise to watch, as failure to hold could invite further selling pressure. On the other hand, a push beyond 1.2975 would indicate that bullish momentum is gaining traction, opening the door to testing higher levels.
Short Term Trading Strategy
Given the technical backdrop and the macroeconomic narrative, short-term positioning requires a balanced approach. Buying pressure remains intact, but the presence of resistance overhead limits the room for immediate gains without a sustained push beyond key levels. Traders will need to assess whether consolidation continues or if there is enough momentum for a decisive move in either direction.
