📈 GBP/USD Rises Toward 1.3650 After Trump’s Tariff Hikes on 14 Countries
The British pound extended gains against the US dollar on Tuesday, with the GBP/USD pair rising toward 1.3650, following a significant geopolitical trigger: former US President Donald Trump announced a new wave of tariffs on 14 countries, including major trading partners in Europe and Asia.
🔍 What’s Driving the GBP/USD Upside?
1. Tariff Tensions Fuel Risk Recalibration:
Trump’s announcement reignited global trade tensions. Markets are now pricing in possible retaliatory measures and reduced demand for US exports, which could weigh on the dollar.
2. Dollar Weakness Benefits Pound:
The US Dollar Index (DXY) slipped as investors reevaluated the greenback’s safe-haven status. A softer dollar generally boosts major currencies like the British pound.
3. UK Macro Stability:
Recent UK data—including better-than-expected PMI figures and easing inflation pressure—have supported the pound. Coupled with hawkish Bank of England sentiment, the fundamentals favored GBP strength.
💹 Technical Outlook
Immediate Resistance: 1.3650
Key Support: 1.3570
Trend Bias: Bullish
Indicators: RSI approaching overbought zone, suggesting momentum but caution in chasing highs.
Traders may watch for a breakout above 1.3650, which could trigger further bullish momentum toward 1.3700.
🧠 Market Sentiment
Risk appetite remains fragile amid global uncertainty. While GBP is benefiting in the short term, ongoing geopolitical and trade developments could introduce volatility. Forex traders are advised to keep a close watch on central bank commentary and tariff fallout.
❓ FAQs: GBP/USD and Tariff Impact
Q1: Why is GBP/USD rising after the tariff announcement?
The tariffs weakened sentiment toward the US dollar, causing it to depreciate and allowing GBP to gain relative strength.
Q2: Which countries were affected by Trump’s tariff hikes?
While the full list includes 14 nations, major targets include EU member states, Canada, South Korea, and Japan—key US trading partners.
Q3: What level is GBP/USD targeting next?
If the pair breaks above 1.3650 convincingly, the next target is likely around 1.3700, with support near 1.3570.
Q4: Is this a long-term bullish trend for GBP/USD?
Too early to confirm. The pair is reacting to short-term dollar weakness. Long-term direction depends on BoE policy, economic data, and US trade dynamics.
Q5: How should forex traders respond to such macro headlines?
Use tight stop-losses, monitor cross-asset volatility, and avoid overleveraging during politically driven moves. Fundamentals may change quickly in reaction to policy shifts.
Published : On 8th July
Published : Pankaj
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