**Pound Sterling Price News and Forecast: GBP/USD Trades With Mild Gains Around 1.3440 in Monday’s Session**
*Original reporting by Anil Panchal via FXStreet*
*(The following article is an expansion and enhancement based on the original news provided by FXStreet. Full credit for initial reporting and data to Anil Panchal.)*
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## Overview
At the beginning of the new week’s trading, the British Pound (GBP) has seen mild gains against the US Dollar (USD), with GBP/USD hovering near the 1.3440 level. This movement comes amid a mix of mild optimism on global risk conditions, nuanced Brexit signals, Bank of England (BOE) commentary, and ongoing speculation about the future of UK and US monetary policy. This article provides a detailed overview of this session’s dynamics, underlying technicals, and the main drivers of sentiment, based on the comprehensive analysis originally published by Anil Panchal of FXStreet.
## Market Drivers Influencing GBP/USD
### 1. Optimism Around Risk Sentiment
– **Global markets are showing signs of risk appetite improvement** as traders generally shrug off concerns over mounting Covid-19 cases and related restrictions.
– The absence of any fresh negative developments about the new Omicron variant is allowing investors to seek riskier assets, supporting the British Pound as a global risk proxy.
### 2. Developments in Brexit Talks
– Over the weekend and into Monday, minimal progress has been achieved in the talks surrounding Brexit’s Northern Ireland Protocol.
– UK officials continue advocating for a renegotiation of certain protocol terms, while EU representatives hold a firm stance.
– The absence of major new negative headlines likely contributes to Sterling’s resilience, but the ongoing risk of breakdowns in negotiation contains any outsized rally.
### 3. Bank of England’s Monetary Policy
– The BOE remains under pressure to balance between supporting the fragile post-Brexit economy and combating the highest inflation rates in a decade.
– Market chatter suggests the BOE may move faster towards policy normalization than previously expected, which supports Sterling’s medium-term outlook.
– Last week, some policymakers hinted at their readiness to act on inflation, which markets have partially priced into the pair.
### 4. US Dollar Dynamics
– The US Dollar is slightly weaker as safe-haven demand fades, with investors rotating into higher-yielding and risk-correlated currencies.
– Dovish comments by some members of the US Federal Reserve, together with profit-taking after a strong US jobs report, add downward pressure to the greenback.
## Technical Analysis
### GBP/USD – Price Action & Key Levels
After closing last week with moderate strength, GBP/USD has opened the week consolidating around the 1.3440 handle. The pair tried to extend Friday’s rebound but remains capped by key resistance levels, while finding buying interest near recent lows.
#### Technical Points to Note
– **Immediate support lies at the 1.3400 level**, where dip-buying interest has re-emerged.
– **Upside resistance is at 1.3470 and further at 1.3500.**
– On the daily chart, the 50-day and 200-day Simple Moving Averages (SMAs) converge near the 1.3550-1.3600 levels, making that a critical zone to watch for any potential breakout.
– **Momentum indicators** such as the Relative Strength Index (RSI) remain neutral-to-positive, indicating the possibility of further upside if macro fundamentals align.
#### Intraday Action
– Early in the Monday London session, GBP/USD rose from the Asian session lows, responding to stronger equity markets and reduced US Dollar demand.
– The pair remains sensitive to any headline risk from ongoing UK-EU negotiations or surprise US data releases.
### Summarized Technical Outlook
– **Bulls need a sustained move above 1.3470 for further upside, with 1.3500 and
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