GBP/USD has fallen over 1% to 1.2947 as risk appetite wanes following China’s announcement of 34% tariffs on US goods. This move prompted a strong response from President Trump and traders shifted towards safer currencies like the USD, Yen, and Swiss Franc.
US Nonfarm Payrolls for March increased to 228K, exceeding expectations of 135K, but the unemployment rate rose from 4.1% to 4.2%. Participants are monitoring upcoming speeches from Federal Reserve Chair Powell and the UK’s GDP and housing data due next week.
Gbpusd Tests Critical Levels
GBP/USD could test the 1.2900 level if bearish momentum continues. A daily close below this level could lead to further declines towards the 200-day Simple Moving Average at 1.2810.
The British Pound experienced varied performance against major currencies this week, showing the greatest strength against the Australian Dollar while generally declining against others.
The Pound’s sharp drop to 1.2947 illustrates how quickly sentiment can shift when broader economic and political forces emerge with intensity. A 1% decline against the Dollar is not insignificant, particularly when driven by global risk aversion following punitive trade measures. Beijing’s decision to implement 34% tariffs on U.S. goods was promptly met with forceful rhetoric from Trump, increasing perceived volatility and leading investors to favour those currencies typically considered steadier in times of uncertainty.
The data released from the United States offers further weight to the Dollar’s strength. March’s Nonfarm Payrolls climbed to 228,000 — a clear beat over the anticipated 135,000. However, despite the robust job creation, the slight uptick in the unemployment rate to 4.2% introduces a layer of complexity. While typically a higher rate might weaken the outlook for the currency, in this context, the broad-based economic resilience seems to have reassured markets. We interpret this as the labour force expanding, which tends to act as a mildly positive read for future demand.
Outlook For Sterling Traders
For sterling traders eyeing near-term strategy, forward-looking focus is likely to shift towards Powell’s upcoming comments. Any remarks interpreted as hawkish may reinforce ongoing Dollar strength, continuing the pressure on GBP/USD. In parallel, domestic figures from the UK — particularly gross domestic product and housing — will be central in shaping the trajectory of the Pound. Should those releases disappoint, further selling pressure on the currency pair could emerge.
The 1.2900 level is shaping up as a key technical threshold. A daily close below this would reflect sustained bearish momentum and may open the path to next support around the 200-day Simple Moving Average, sitting near 1.2810. We tend to see longer-term moving averages as strategic levels, often acting as areas where leveraged positions are reassessed.
The Pound’s broader weekly performance reveals its vulnerability in the current macro backdrop. While it did appreciate slightly against currencies tied to commodity prices — most notably the Australian Dollar — it still fell against most of the G10 complex. That divergence provides insight: weakness in risk-sensitive currencies isn’t strong enough to lift GBP more broadly.
Everything now hinges on incoming speeches and economic prints. The market has already shown how sensitive it is to external shocks. For traders positioning in derivatives, taking a shorter-term approach with tighter parameters may prove more suitable while volatility remains elevated. Reaction to direct headlines and data points remains aggressive — and until those impulses settle, adjustments to exposure and a defined risk approach will offer the most consistent footing.
