**Pound Sterling Price News and Forecast: GBP/USD Edges Lower to Around 1.3500 During Early European Session**
*Original author: [FXStreet](https://www.fxstreet.com/news/pound-sterling-price-news-and-forecast-gbp-usd-edges-lower-to-around-13500-during-early-european-session-202508190450)*
—
### Introduction
The pound sterling, often referred to as the “cable” in forex trading circles when paired with the US dollar (GBP/USD), is closely monitored by traders, investors, businesses, and policymakers alike. The early European session on August 19, 2020, observed a notable slip in the GBP/USD pairing, with the pair trading around the 1.3500 mark. Understanding the dynamics behind this price action, the broader context influencing sterling and dollar demand, and the technical and fundamental landscape is key for anyone with exposure to this major currency pair.
—
### GBP/USD Pulls Back: Overview of Market Movement
– The GBP/USD dipped during the early European trading session, retreating to trade near the 1.3500 support region.
– The decline was in response to renewed US dollar strength, as well as subdued investor sentiment regarding riskier currencies.
– Market participants were cautious amid evolving global risk trends and fresh remarks from influential policymakers.
– The move came in the context of recent volatility, as the pound struggled to sustain gains above the 1.3600 resistance level.
—
### Key Drivers Behind GBP/USD Movement
#### 1. Resurgence in US Dollar Demand
– The US dollar index (DXY) saw buying interest thanks to safe-haven flows, especially amid concerns over Chinese economic data and ongoing COVID-19 uncertainties.
– Federal Reserve officials’ hints at potential policy tightening and concerns about rising US Treasury yields have supported the dollar.
– Investors are anticipating changes in US monetary policy, particularly regarding the timeline of asset tapering and future interest rate hikes.
#### 2. Risk-off Market Sentiment
– Risk-off sentiment refers to investors reducing exposure to riskier assets amid global uncertainty, shifting capital towards perceived safe-havens like the US dollar and US government bonds.
– Factors contributing to this risk aversion included:
– Concerns over the global economic recovery in light of the Delta and Omicron coronavirus variants.
– Signs of slowdown in Chinese economic growth, influencing risk appetite worldwide.
– Geopolitical tensions and unresolved trade disputes between major economies.
#### 3. UK Domestic Developments
– The UK awaited key macroeconomic indicators, particularly inflation and employment data, to gauge the pace and sustainability of the recovery.
– Speculation surrounded the Bank of England’s (BoE) next move, with markets uncertain about the timing and scale of potential rate hikes.
– Ongoing Brexit-related trade issues and political uncertainty (e.g., the Northern Ireland protocol) continued to pose headwinds for the pound.
—
### Technical Analysis: GBP/USD Outlook
#### Short-Term Momentum
– After attempts to breach the 1.3600 upper boundary, GBP/USD failed to sustain follow-through and reversed lower.
– The 1.3500 region served as immediate technical support, which, if breached, could invite further selling pressure and deeper corrective moves.
#### Key Levels to Watch
– **Daily Resistance:** The 1.3600 level remains a tough barrier. A confirmed break above could open doors for further gains, targeting 1.3660 and 1.3700.
– **Immediate Support:** 1.3500 is a psychological and chart-based support zone. A sustained move below could expose the pair to greater downside, toward 1.3450 and 1.3400.
– **Moving Averages:** Price action relative to the 50-period and 200-period moving averages on the four-hour and daily charts provide additional trading cues.
#### Oscillator Readings and Indicators
– The Relative Strength Index (RS
Read more on GBP/USD trading.