The British pound rose to around 1.3570 against the US dollar during Monday’s European trading session. The GBP/USD exchange rate climbed as the US dollar weakened across global markets. The dollar’s decline came amid uncertainty ahead of the US-China trade negotiations scheduled to take place in London later today.
The US Dollar Index (DXY), which tracks the dollar against six major currencies, slipped back to approximately 99.00, retreating from a sharp gain on Friday.
Trade Talks Confirmed as Economic Concerns Persist
Officials from both Washington and Beijing confirmed that representatives will meet to discuss trade terms. The announcement arrives as the US faces challenges in its labor market, while the Chinese economy is experiencing deflationary pressures.
On Friday, the US released its nonfarm payrolls report for May, showing that job creation figures for March and April were revised downward by 95,000. However, May saw an increase of 139,000 new jobs, slightly surpassing the expected 130,000.
Meanwhile, China’s National Bureau of Statistics reported that its consumer price index (CPI) fell by 0.1% year-on-year in May, indicating persistent deflation.
President Trump Expresses Optimism About Trade Talks
Over the weekend, US President Donald Trump shared his confidence in the upcoming trade negotiations via a post on Truth Social. He stated that key US officials, including Treasury Secretary Bessant, Commerce Secretary Lutnick, and US Trade Representative Ambassador Greer, would meet with Chinese counterparts in London.
Trump said, “The meeting should go very well,” signaling a positive outlook for the discussions.
Market Reaction Remains Cautious Despite Positive Signals
From a technical perspective, the trade talks announcement could support the US dollar. However, the dollar weakened as many market experts expect sentiment to remain fragile until clear progress is made.
Analysts at Saxo Bank told Reuters, “It may be better to reach a deal and continue negotiations than not, but the impact on market sentiment is likely to remain modest unless we have a substantial breakthrough.”
Technical Outlook for GBP/USD
The pound-dollar pair jumped to around 1.3570 on Monday, aiming to retest the three-year high of 1.3617 reached on June 5.
The technical indicators suggest a positive trend. The 20-day exponential moving average (EMA) is turning upward near 1.3464, and the 14-day relative strength index (RSI) remains above 60.00, signaling sustained bullish momentum.
On the upside, the pair faces key resistance at 1.3750, the high recorded on January 13, 2022. Support is found near 1.3434, based on the high from September 26.
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