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Key Highlights:
GBP/USD is up near 1.357, its highest level since February 2022
Technical setup shows an ascending triangle with resistance at 1.37
A breakout above 1.37 could target 1.435 and an open path toward pre-Brexit levels
The current UK-US trade deal adds short-term stability amid global tariff risks
BoE rate decision on Aug 7, 2025 may push GBP higher or reverse gains
GBP is seen as more resilient than EUR, due to tariff positioning
Trade the GBP with Bybit here.
The British pound (GBP) is one of the four major global currencies, alongside the US dollar (USD), euro (EUR) and Japanese yen (JPY). While it was once dominated by Brexit-driven volatility, that narrative has faded significantly since the 2024 UK elections, which brought Keir Starmer to power and moved Brexit from the active trading dialogue.
Despite this, GBP/USD is still trading below pre-Brexit levels. Before the 2016 vote, it hovered near 1.50 — and today, it's around 1.35, marking its highest level since February 2022, just before Russia attacked Ukraine.
While GBP/USD and EUR/USD have both rallied to pre-war highs, the macro scene in the UK is diverging from Europe in several key areas:
Defense spending and equities: Germany and other EU countries are heavily investing in defense, due to the ongoing Ukraine war. This has helped lift the DAX 40 by 18% year-to-date, as compared to just 7% for the FTSE 100.
Inflation and interest rates: The UK continues to see higher inflation and interest rates than the eurozone, and the Bank of England is currently maintaining a policy rate of 4.25%, above the EU benchmark.
Trade relations with the US: The UK is the only country so far to have secured a trade deal with President Trump, offering near-term protection from upcoming July 8 tariff deadlines. This could help position the British pound as a temporary safe haven, as compared to other trade-exposed currencies.
The two most significant near-term events for GBP traders are as follows:
BoE interest rate decision — August 7: At the BoE’s June 19 meeting, three of the nine members voted to cut rates, while the majority held steady at the current rate (4.25%). A shift in tone or policy at the next meeting could materially impact GBP valuation. If a rate cut occurs, GBP may weaken; if rates are held or guidance remains hawkish, GBP could strengthen.
Tariff deadlines — July 8 and beyond: Tariffs between the US and major trading partners (EU, Japan, Canada) are set for a decision on July 8. Since the UK has already signed a deal, it's shielded from these developments, potentially increasing demand for GBP as a relative safe currency.
On the daily chart, GBP/USD is sitting at a technically critical zone, resting just beneath a rising resistance trendline that began in May 2022. This line has rejected the price three times, and the pair is once again approaching it.
The key resistance level is 1.37.
A breakout above 1.37 would mark the highest level since January 2022.
The next upside target is 1.435, the high from April 2018, which would represent a 6% gain from current levels.
Above 1.435, the market may begin to price in the potential for a return to pre-Brexit levels above 1.50.
This setup forms an ascending open triangle in which the apex is positioned on the left, an uncommon structure that reflects broad-based upward pressure (rather than a squeeze). Unlike a closed triangle, this open formation suggests potential for continued expansion.
Supporting indicators are as follows:
The moving average convergence divergence (MACD) has turned flat at the resistance zone, indicating indecision, but no bearish divergence.
The relative strength index (RSI) indicator is trading near overbought territory (above 70), historically a zone of caution, but not yet signaling reversal.
If rejected from the trendline, GBP/USD could retest medium-term horizontal support at 1.20, which would complete the third leg of the triangle.
For now, traders are positioning for a continuation of the broader pattern, watching for a confirmed breakout or strong rejection at the trendline.
With GBP/USD trading at its highest level since early 2022, the British pound is approaching a key resistance area that could shape its outlook for the rest of the year. A successful breakout above 1.37 would reinforce bullish momentum, especially if supported by steady UK rates and a trade position that’s less exposed to tariffs.
On the other hand, any dovish surprise from the Bank of England (or global risk-off sentiment) could send the pair back toward the 1.20 support level.
Traders are recommended to closely watch the August 7 rate decision and July 8 tariff developments, while tracking momentum near the critical 1.37 zone. GBP pairs such as EUR/GBP and GBP/JPY could offer additional opportunities during this pivotal period.