- The GBP/USD price analysis shows increased demand for the pound.
- The US president announced a 25% reciprocal tariff on Japan and South Korea.
- Trump threatened to impose a 50% tariff on copper imports.
The GBP/USD price analysis shows increased demand for the pound over other currencies amid renewed Trump tariff threats. Sterling has an edge because the UK is among the few countries that have already signed trade deals with the US. Therefore, it serves as a shelter for traders fleeing higher tariffs in other countries, such as Japan.
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The pound gained against the dollar on Tuesday and Wednesday after Trump resumed his tariff threats. The US president announced a 25% reciprocal tariff on Japan and South Korea. The two countries failed to reach a trade deal with the US. Moreover, Trump has stated that he will send letters to additional countries that have been unable to get a deal within the 90-day period.
Furthermore, the US president threatened to impose a 50% tariff on copper imports. He also threatened tariffs on pharmaceuticals and semiconductors. These threats raised concerns about potential trade wars that could harm the global economy.
However, for the pound, it was a time to shine. The UK is among the few countries that have signed a deal with the US. Therefore, it has more protection against higher tariffs, giving it an edge over other countries.
Market participants are still hoping for more deals before August 1, when the higher tariffs will come into effect.
GBP/USD key events today
GBP/USD technical price analysis: Price stalls near the 1.3601 key level
On the technical side, the GBP/USD price has stalled near the 1.3601 key level. It trades below the 30-SMA, with the RSI under 50, supporting a bearish bias. Sentiment recently shifted after bulls failed to break above the 1.3750 resistance level.
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Although the price made a higher high, the RSI made a lower one, signalling weaker momentum. As a result, bears took charge by breaking below the SMA.
However, they have found it challenging to go beyond the 1.3601 support level. Although the price recently broke below the support, it has remained attached to it. The price must detach from this level and make lower lows and highs, to continue the downtrend. This would allow USD/JPY to retest the 1.3400 support.
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