GBP/USD Slumps Towards Two-Month Trend Support

GBP/USD is trading lower on the day as sterling comes under renewed pressure from soft U.K.-specific fundamentals and lingering uncertainty around the economic outlook. The pound weakened as investors continued to digest the Bank of England’s more dovish stance following last year’s rate cut, with markets increasingly pricing further easing as growth momentum cools. While broader risk sentiment has been relatively stable, sterling has underperformed peers as domestic concerns take precedence.

UK data and commentary continue to point to a fragile growth backdrop, particularly in interest-rate-sensitive sectors such as housing and construction, reinforcing expectations that the BOE will prioritize supporting activity over guarding against inflation. With little in the way of positive domestic catalysts today, GBP/USD has been driven lower by relative policy expectations, leaving the pound vulnerable as markets look ahead to upcoming U.K. data and further guidance from the BOE.

GBP/USD Daily Price History

In the above chart, GBP/USD has retraced about half of its gains this week in the past two sessions, leaving the pair effectively unchanged for 2026. At first blush, the retracement would appear to be a correction within a modest uptrend since late-November, buttressed by positive slopes in each of the 20-day, 50-day, and 100-day exponential moving averages (EMA). A drop below 1.3400, however, would see the series of higher highs and higher lows over the past six weeks negated, concurrently representing a break below the 20-day EMA. Should GBP/USD trade above 1.3600 by the end of the month, traders may find a symmetrical triangle breakout taking shape.

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