Skip to content

CFDs are complex financial instruments and come with a high risk of losing money rapidly due to leverage. You should consider whether you understand how CFDs work, and whether you can afford to take the high risk of losing your money. CFDs are complex financial instruments and come with a high risk of losing money rapidly due to leverage. You should consider whether you understand how CFDs work, and whether you can afford to take the high risk of losing your money.

GBP/USD price outlook: pound-dollar to probe 2018 swing high

Pound sterling bulls propel GBP/USD price action within reach of its 2018 swing high, but can the cable maintain upward momentum?

GBP/USD Source: Bloomberg

Pound sterling strenght propelling GBP/USD to 35-month high

  • GBP/USD pierces the $1.40-price level for the first time since early 2018
  • Pound sterling gaining ground as UK lockdowns are lifted post-Brexit deal
  • Broader US dollar weakness could exacerbate GBP/USD buying pressures

GBP/USD price action has been ripping higher over the last two and a half weeks. Since its early-February low, the pound-dollar has surged 500 pips and now trades at its highest level in nearly three years. Improving outlook for the UK economy, largely stemming from easing Covid-19 restrictions and reduced uncertainty given the recent Brexit trade deal, stands out as a primary driver fueling pound sterling strength. GBP/USD has likely benefited from broad US dollar selling as well.

GBP/USD price chart: weekly time frame (September 2017 to February 2021)

GBP/USD weekly chart Source: IG charts
GBP/USD weekly chart Source: IG charts

That said, the pound sterling could continue gaining ground against its US dollar peer and extend its rally deeper into 2018 highs. Though the relative strength index on a weekly chart suggests GBP/USD price action hovers in ‘overbought’ territory, bullish momentum has re-accelerated as highlighted by the moving average convergence/divergence (MACD) indicator, and Bollinger band width expansion also helps facilitate upside potential. GBP/USD bulls might look to the 8-week and 20-week simple moving averages (SMAs) as possible technical support zones if a consolidation lower materialises.

GBP/USD price chart - IG client sentiment: weekly time frame (23 February 2021)

GBP/USD price chart - IG client sentiment Source: IG charts

While there currently is a mixed trading signal for GBP/USD according to the latest IG client sentiment (IGCS) data, the vast majority of retail traders remain net-short. Not to mention, there was an -11% weekly decrease in long positioning. Seeing that we typically look at IGCS through the lens of a contrarian, this suggests that the bullish GBP/USD price trend may continue.


This information has been prepared by IG, a trading name of IG Limited. In addition to the disclaimer below, the material on this page does not contain a record of our trading prices, or an offer of, or solicitation for, a transaction in any financial instrument. IG accepts no responsibility for any use that may be made of these comments and for any consequences that result. No representation or warranty is given as to the accuracy or completeness of this information. Consequently any person acting on it does so entirely at their own risk. Any research provided does not have regard to the specific investment objectives, financial situation and needs of any specific person who may receive it. It has not been prepared in accordance with legal requirements designed to promote the independence of investment research and as such is considered to be a marketing communication. Although we are not specifically constrained from dealing ahead of our recommendations we do not seek to take advantage of them before they are provided to our clients.
CFDs are a leveraged products. CFD trading may not be suitable for everyone and can result in losses that exceed your initial deposit, so please ensure that you fully understand the risks involved.

Start trading forex today

Find opportunity on the world’s most-traded – and most-volatile – financial market

  • Trade spreads from just 0.6 points on EUR/USD
  • Analyse with clear, fast charts
  • Speculate wherever you are with our intuitive mobile apps

See an FX opportunity?

Try a risk-free trade in your demo account, and see whether you’re onto something.

  • Log in to your demo
  • Try a risk-free trade
  • See whether your hunch pays off

See an FX opportunity?

Don’t miss your chance – upgrade to a live account to take advantage.

  • Get spreads from just 0.6 points on popular pairs
  • Analyse and deal seamlessly on fast, intuitive charts
  • See and react to breaking news in-platform

See an FX opportunity?

Don’t miss your chance. Log in to take your position.

Live prices on most popular markets

  • Forex
  • Shares
  • Indices

Prices above are subject to our website terms and agreements. Prices are indicative only. All shares prices are delayed by at least 15 mins.

Plan your trading week

Get the week’s market-moving news sent directly to your inbox every Friday. The Week Ahead gives you a full calendar of upcoming economic events, as well as commentary from our expert analysts on the key markets to watch.

For more info on how we might use your data, see our privacy notice and access policy and privacy webpage.

You might be interested in…

Find out what charges your trades could incur with our transparent fee structure.

Discover why so many clients choose us, and what makes us a world-leading provider of CFDs.

Stay on top of upcoming market-moving events with our customisable economic calendar.