GBP/USD Rises to 1.34 on USD Weakness in the Sell America Trade

GBP/USD has been rising for 11 straight sessions, rising above 1.34 and trading a whopping 11% higher since mid-January, marking its longest winning streak in years.

The pound has risen to its highest level since September last year despite cooling inflation and expectations that the Bank of England will cut interest rates more aggressively amid economic uncertainty due to Trump’s trade tariffs. The pound’s strength is more a factor of US dollar weakness amid the sell-America trade.

The UK economic calendar is relatively quiet this week, with PMI data due tomorrow and retail sales on Friday.

The US dollar has fallen to a fresh three-year low versus its major peers, under pressure following renewed calls from President Trump for interest rate cuts and amid rising concerns over Fed independence as Trump continues to attack Fed Chair Powell’s stance on interest rates.

For now, Fed Chair Powell’s refusal to cut rates further sparked a verbal assault from President Trump, with markets growing more fearful that Trump may ultimately try to fire the central bank chief over the matter. Whether Trump is legally allowed to do so remains unclear. No direct legal precedent exists since no President has ever tried to fire a Fed chief. While the move appears unlikely with Trump, uncertainty remains high.

U.S. stocks sold off sharply yesterday as investors sold out of everything U.S.-related.

The US economic calendar is quiet today. Five Fed speakers are on the diary, so it’ll be interesting to see how they handle the thorny political issue.

GBP/USD Forecast – Technical Analysis

GBP/USD trades in an ascending channel dating back to the start of the year. The price has extended gains to 1.34, just below the September 2024 high and the upper band of the rising channel. The RSI is well overbought, so a period of consolidation could be on the cards. The 1.3430 level will be watched closely to see if it forms a double top reversal pattern.

A break above 1.3430 brings the 1.35 round number into focus ahead of 1.3750, the 2022 high.

Support is seen at 1.33 round number ahead of 1.32.

DAX Falls as Trumps Attacks Powell Hitting Risk Sentiment

The DAX , along with its European peers, is heading lower following the Easter weekend after Donald Trump repeated his attacks on Federal Reserve chair Jerome Powell, insisting he cut interest rates.

Trump signalled that the power could soon be out of a job with the intensifying precious metals and active markets. On Monday, the US stock market was sharply lower, with the S&P down 2.5% as investors showed signs of panic.

The sell-off in the US sparked a risk-off mood that has carried over into the European open. If the US sneezes, the rest of the world catches a cold, leaving global equities vulnerable. Gold has risen above $3500 to a record high.

On the data front, attention will be on eurozone consumer confidence , which is expected to deteriorate further in April to -15.6, down from -14.5. Deteriorating economic consumer sentiment comes amid uncertainties surrounding trade tariffs.

That comes after the ECB cut interest rates by 25 basis points in April and is likely to cut by a further 25 basis points in June to support the deteriorating economic outlook.

DAX Forecast – Technical Analysis

After recovering from the 2025 low of 18,800, the DAX has risen above 21,000 but struggled to retake the falling trendline dating back to the mid-March record high, the 100 SMA, and the April 9 high around 21,500. Buyers will need to extend the recovery above this resistance zone to create a higher high and extend gains towards 22,000.

Failure to rise above this resistance zone could see the price retest 20,675, the weekly low, ahead of 20,450. Below here, the 200 SMA at 21,157 is exposed ahead of 20,000.

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