The downward trajectory of GBP/USD has continued since May last year, allowing bears to drive prices to psychological support at 1.3000 which may continue to hold sellers at bay. After failing to break below this level, GBP/USD rebounded, reaching the next zone of resistance at 1.3286, the 38.2% retracement of the 2022 move. If buyers are able to gain traction above this level, a break above 1.3400 may allow for a retest of trendline resistance, currently holding at 1.3644, which would leave the door open for a re-test of the January high at 1.3749.
GBP/USD Weekly Chart
EUR/GBP Under Pressure at Support
Given their large dependence on Russia for oil and gas, the ongoing war has placed the European Central Bank (ECB) in a tough position, as the pace of their monetary tightening will likely continue to lag behind that of the BoE and the Fed throughout Q2. As bulls aim to break through trendline resistance (from Jan 2021) at around 0.8400, big levels remain at the key psychological levels of 0.8600 and 0.8700 respectively.
However, if geopolitical tensions continue to rise, a break below the 2022 low at around 0.8200 could see further downward pressure accelerating the move towards the April 2016 low at 0.8110 with the next level of support holding at 0.8000.
EUR/GBP Weekly Chart