Sterling Gains as Tariff Ruling Hits Dollar Mood

Key Moments

The US Dollar weakened broadly after the US Supreme Court struck down Trump’s reciprocal tariffs, raising policy uncertainty.
Markets increased the implied probability of a Bank of England rate cut in March to 75% following soft UK labor data and mostly benign CPI.
GBPUSD rebounded after breaking a key trendline, with traders now watching how price behaves around major support and resistance levels across timeframes.

Fundamental Overview

US Dollar: Tariff Ruling Pressures the Greenback

The US Dollar declined broadly on Friday after the US Supreme Court invalidated Trump’s reciprocal tariff framework. The resulting uncertainty around trade policy appears to have weighed on the greenback, even though the overall tariff landscape has not shifted dramatically.

New tariffs have already been implemented under a separate legal basis, and USTR Greer has indicated that existing tariff arrangements remain intact and “they will be honoured.” In addition, the latest measures have actually lowered the effective average tariff rate, which could be interpreted as a constructive development.

Despite the recent weakness, the broader USD backdrop is viewed as largely unchanged. Key risks continue to center on a potential military escalation between the US and Iran, which could support the Dollar in a severe risk-off environment, and the possibility of a hawkish repricing if incoming US economic data prove stronger, which would also be supportive for the currency.

British Pound: Rate Cut Odds Rise After Soft Data

For the British Pound, market-implied odds of a Bank of England rate reduction in March have risen to 75% following a notably weaker-than-expected UK labor market report on Tuesday and mostly benign UK CPI figures on Wednesday. Sterling subsequently dropped to a new monthly low before recovering in the wake of the US Supreme Court’s tariff decision.

At its most recent meeting, the BoE delivered a dovish hold, surprising markets as 4 members voted for an immediate rate cut compared with 2 expected. The central bank also adjusted its forward guidance, moving from “the bank rate is likely to continue on a gradual downward path” to “the bank rate is likely to be reduced further”.

GBPUSD Technical Picture

Timeframe	Key Technical Features	Bias Around Levels
Daily	Break below major trendline, followed by a retest from beneath.	Sellers likely to defend the broken trendline; buyers watching for a breakout higher toward the downward trendline.
4-hour	Price action focused around the previously broken trendline and broader downward trendline.	Bearish interest expected near the broken trendline; buyers looking for an upside break to extend gains.
1-hour	Minor upward trendline currently defining intraday bullish momentum; daily range marked by red lines.	Buyers likely to use the minor trendline as support; sellers watching for a downside break to reassert bearish pressure.

GBPUSD Technical Analysis – Daily Timeframe

On the daily chart, GBPUSD has moved below a major ascending trendline and then rebounded to retest that level from the underside. Sellers are expected to focus on this broken trendline as a key zone to reenter short positions, with risk defined just above it, aiming for fresh lows if resistance holds. Buyers, in contrast, will be looking for a sustained move back above the trendline to extend the recovery toward the broader downward trendline, where bears may again seek short setups.

GBPUSD Technical Analysis – 4-Hour Timeframe

The 4-hour view largely echoes the daily structure. Market participants on the short side are likely to remain active around the previously broken trendline, using it as a reference point for renewed selling. Those favoring the upside will monitor for a clear break above this area to build on the rebound and target the higher downward trendline as the next resistance region.

GBPUSD Technical Analysis – 1-Hour Timeframe

On the 1-hour chart, a minor ascending trendline is currently guiding bullish momentum on this shorter timeframe. Buyers are expected to continue leaning on this trendline as dynamic support in an attempt to drive price into new near-term highs. Sellers, however, will be watching for a decisive move below this line to signal a potential shift back toward a bearish intraday bias and to press for new lows. The red lines on the chart delineate the average daily range for today.

Upcoming Data and Event Drivers

The near-term data calendar for the US includes several releases that could influence USD direction and, by extension, GBPUSD:

Tomorrow: weekly US ADP jobs data
Thursday: latest US Jobless Claims figures
Friday: US PPI data

In addition to these scheduled releases, developments related to US-Iran tensions remain an important catalyst to watch, given their potential impact on risk sentiment and the US Dollar.