Key Events : The DXY’s return to 97 pressures GBPUSD below 1.36, in line with UK political tensions and BOE rate cut sentiment
The pound and major currency pairs are facing pressure against the US Dollar Index following the 7-month high NFP print. Focus now turns to today’s US CPI report to confirm the sustainability of this rebound, with mixed expectations in sight.
The DXY made its way back to the 97 mark following the 130k NFP print and an extended weekly wick since the end of January, hinting at bullish rebound risks across the currency market.
The GBPUSD pair faces additional pressure from UK political tensions, particularly after Prime Minister Keir Starmer’s chief of staff resigned amid the Mandelson scandal, raising questions about leadership stability within the government.
Last week’s 4–5 vote for a BOE rate hold keeps rate cut expectations and bearish sentiment on the pound afloat, especially given the Fed’s reinforced rate hold outlook after better-than-expected NFP data.
Technically speaking, the pair is facing pressure below the 1.36 mark, a level that can open the way to steeper drawdowns, especially if the US Dollar Index maintains its bullish hold above 97, 98.50, and 99.50.
Technical Analysis: Quantifying Uncertainty
GBPUSD Outlook: Daily Time Frame – Log Scale
Source: Trading view
From a daily angle, a bullish bias on the GBPUSD chart can be seen extending from the lows of November 2025. This bias is currently under pressure for a bearish breakout below the 1.3590 mark, which could open the way to deeper drawdowns toward 1.3490 first and 1.3330 second.
The daily RSI is also at a crossroads, holding above the neutral bound and requiring either bearish or bullish confirmation to extend toward its respective extremes.
Should momentum hold above 1.36, gains are expected to redirect toward 1.3780 and 1.3880 before confirming a longer-term bullish breakout toward the 1.40 zone.
GBPUSD Outlook: Monthly Time Frame – Log Scale
Source: Trading view
From a monthly angle, the pair is challenging an 8-month resistance, similar to the EURUSD outlook, below the 1.3780–1.3880 zone. This resistance may pressure prices back toward the previously mentioned lows in steeper scenarios below 1.33 to 1.30.
Alternatively, a sustained push above 1.3880 toward 1.40 and the 2021 high at 1.4250 would confirm the bullish breakout bias beyond the bounds of a descending consolidation that has been in place since the highs of 2007.
Written by Razan Hilal, CMT
Follow on X: @Rh_waves
