The pound sterling remains high against the dollar, awaiting a breakout from its trading range.
2026-05-08 14:34:32
The British pound maintained a modest upward trend against the US dollar (GBP/USD) during Friday's Asian trading session, trading around 1.3560. As market expectations for easing tensions in the Middle East increased, safe-haven buying of the US dollar cooled, providing some support for the pound.
The global foreign exchange market has recently been primarily influenced by the situation in the Middle East, expectations regarding the Federal Reserve's policies, and changes in global risk sentiment. Previously, military tensions between the US and Iran had briefly strengthened the US dollar index, but as market optimism regarding a potential ceasefire agreement grew, risk appetite gradually improved.
US President Trump stated that the ceasefire agreement between the US and Iran remains in effect, adding that markets would clearly perceive the change if the ceasefire were to end. This has somewhat alleviated investor concerns about a full-blown escalation of conflict in the Middle East. The US government is currently awaiting a formal response from Iran regarding its proposals to reopen the Strait of Hormuz and end the conflict. Market analysts believe that if the two sides can engage in further negotiations, global market risk aversion may continue to cool.
The easing of tensions in the Middle East has reduced demand for the US dollar as a safe haven, a key reason for the current rebound in GBP/USD. When market risk appetite improves, funds typically flow from safe-haven assets like the US dollar to risk assets and non-US currencies, thus supporting the pound's performance. However, overall market trading remains cautious. Investors are awaiting tonight's release of the US April non-farm payroll data to further assess the US economic performance and the Federal Reserve's future monetary policy path.
The market expects the US to add approximately 62,000 non-farm payroll jobs in April, a significant decrease from 178,000 in March, while the unemployment rate is expected to remain around 4.3%. If the US employment data is significantly stronger than expected, it would mean that the US labor market remains resilient, and the Federal Reserve may continue to maintain high interest rates for a longer period. This would push the US dollar index and US Treasury yields higher, thus suppressing the GBP/USD exchange rate. Conversely, if the non-farm payroll data is weak, it could strengthen market expectations for future Fed rate cuts, thereby weakening the dollar and pushing GBP/USD further up.
Besides US factors, the recent hawkish stance of the Bank of England (BoE) has also provided support for the pound. The BoE previously announced that it would maintain its benchmark interest rate at 3.75%, in line with market expectations. However, the BoE did not rule out the possibility of further tightening in its policy statement. BoE Governor Andrew Bailey stated that if the Middle East conflict leads to a sustained rise in energy prices and reignites inflationary pressures, the BoE may take "stronger tightening measures."
The Bank of England's hawkish stance is a key fundamental factor supporting the pound recently. Despite the overall slowdown in UK economic growth, the market still perceives relatively persistent inflationary pressures, meaning UK interest rates may remain high for an extended period. From an economic perspective, the UK service sector and consumer spending are currently relatively stable, but manufacturing activity remains weak. Meanwhile, energy price fluctuations remain a significant variable affecting UK inflation. If the situation in the Middle East pushes up international oil prices again, imported inflationary pressures in the UK could rise again, which is a major reason why the Bank of England continues to maintain a cautious stance.
From a daily chart perspective, GBP/USD maintains an overall bullish bias within a range. The pair previously broke through the key resistance zone of 1.3500 and reached a new high, indicating that the medium-to-long-term bullish structure remains intact. Technically, the daily MACD remains above the zero line; although the red bars have shortened slightly, the overall bullish momentum has not weakened significantly. The RSI is currently around 60, indicating that the market remains bullish overall, but short-term chasing sentiment is beginning to cool. Regarding the moving average system, the 5-day, 10-day, and 20-day moving averages continue to maintain a bullish alignment, with short-term moving averages continuing to diverge upwards, providing technical support for the pair. Currently, 1.3500 has become an important medium-term support area. If GBP/USD can effectively break through the 1.3600 area, it may open up further upside potential. The next target could be 1.3650 or even 1.3700. However, it should be noted that market volatility may increase significantly before the release of the US non-farm payroll data. If the data is strong, the US dollar may regain support, potentially leading to a temporary pullback in GBP/USD.
Editor's Summary : The British pound is currently maintaining a generally strong structure against the US dollar. Easing tensions in the Middle East have reduced demand for the dollar as a safe haven, while the Bank of England's hawkish stance continues to support the pound. From a technical perspective, the daily trend for GBP/USD remains bullish, but the 4-hour chart has entered a consolidation phase at higher levels. Going forward, if US employment data is weak, expectations of a Fed rate cut may continue to rise, further driving the pound higher; conversely, if the data is strong, the dollar may regain support, and the exchange rate may enter a period of correction.
The global foreign exchange market has recently been primarily influenced by the situation in the Middle East, expectations regarding the Federal Reserve's policies, and changes in global risk sentiment. Previously, military tensions between the US and Iran had briefly strengthened the US dollar index, but as market optimism regarding a potential ceasefire agreement grew, risk appetite gradually improved.
US President Trump stated that the ceasefire agreement between the US and Iran remains in effect, adding that markets would clearly perceive the change if the ceasefire were to end. This has somewhat alleviated investor concerns about a full-blown escalation of conflict in the Middle East. The US government is currently awaiting a formal response from Iran regarding its proposals to reopen the Strait of Hormuz and end the conflict. Market analysts believe that if the two sides can engage in further negotiations, global market risk aversion may continue to cool.
The easing of tensions in the Middle East has reduced demand for the US dollar as a safe haven, a key reason for the current rebound in GBP/USD. When market risk appetite improves, funds typically flow from safe-haven assets like the US dollar to risk assets and non-US currencies, thus supporting the pound's performance. However, overall market trading remains cautious. Investors are awaiting tonight's release of the US April non-farm payroll data to further assess the US economic performance and the Federal Reserve's future monetary policy path.
The market expects the US to add approximately 62,000 non-farm payroll jobs in April, a significant decrease from 178,000 in March, while the unemployment rate is expected to remain around 4.3%. If the US employment data is significantly stronger than expected, it would mean that the US labor market remains resilient, and the Federal Reserve may continue to maintain high interest rates for a longer period. This would push the US dollar index and US Treasury yields higher, thus suppressing the GBP/USD exchange rate. Conversely, if the non-farm payroll data is weak, it could strengthen market expectations for future Fed rate cuts, thereby weakening the dollar and pushing GBP/USD further up.
Besides US factors, the recent hawkish stance of the Bank of England (BoE) has also provided support for the pound. The BoE previously announced that it would maintain its benchmark interest rate at 3.75%, in line with market expectations. However, the BoE did not rule out the possibility of further tightening in its policy statement. BoE Governor Andrew Bailey stated that if the Middle East conflict leads to a sustained rise in energy prices and reignites inflationary pressures, the BoE may take "stronger tightening measures."
The Bank of England's hawkish stance is a key fundamental factor supporting the pound recently. Despite the overall slowdown in UK economic growth, the market still perceives relatively persistent inflationary pressures, meaning UK interest rates may remain high for an extended period. From an economic perspective, the UK service sector and consumer spending are currently relatively stable, but manufacturing activity remains weak. Meanwhile, energy price fluctuations remain a significant variable affecting UK inflation. If the situation in the Middle East pushes up international oil prices again, imported inflationary pressures in the UK could rise again, which is a major reason why the Bank of England continues to maintain a cautious stance.
From a daily chart perspective, GBP/USD maintains an overall bullish bias within a range. The pair previously broke through the key resistance zone of 1.3500 and reached a new high, indicating that the medium-to-long-term bullish structure remains intact. Technically, the daily MACD remains above the zero line; although the red bars have shortened slightly, the overall bullish momentum has not weakened significantly. The RSI is currently around 60, indicating that the market remains bullish overall, but short-term chasing sentiment is beginning to cool. Regarding the moving average system, the 5-day, 10-day, and 20-day moving averages continue to maintain a bullish alignment, with short-term moving averages continuing to diverge upwards, providing technical support for the pair. Currently, 1.3500 has become an important medium-term support area. If GBP/USD can effectively break through the 1.3600 area, it may open up further upside potential. The next target could be 1.3650 or even 1.3700. However, it should be noted that market volatility may increase significantly before the release of the US non-farm payroll data. If the data is strong, the US dollar may regain support, potentially leading to a temporary pullback in GBP/USD.
Editor's Summary : The British pound is currently maintaining a generally strong structure against the US dollar. Easing tensions in the Middle East have reduced demand for the dollar as a safe haven, while the Bank of England's hawkish stance continues to support the pound. From a technical perspective, the daily trend for GBP/USD remains bullish, but the 4-hour chart has entered a consolidation phase at higher levels. Going forward, if US employment data is weak, expectations of a Fed rate cut may continue to rise, further driving the pound higher; conversely, if the data is strong, the dollar may regain support, and the exchange rate may enter a period of correction.
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