Should We Be Wary of Further Downside in GBP/USD, Which Has Hit a Year-to-Date Low?

Should We Be Wary of Further Downside in GBP/USD, Which Has Hit a Year-to-Date Low?

16.01.2026

In the U.S. currency market yesterday, the U.S. dollar traded in a back-and-forth pattern against the yen. The USD/JPY pair fluctuated between 158.177 and 158.871, with price action remaining within the range of the 20-period moving average (MA) on the hourly chart throughout the session.On the 4-hour chart, the pair is searching for direction just below the 20-period moving average, while on the daily chart, the +2σ Bollinger Band is acting as an upper resistance level, causing the upward momentum to stall. Note that during today’s Asian session, the price has fallen to the 157-yen level, so we should keep a close eye on price movements during the European session.

Among European currencies, the pound fell against the U.S. dollar. The GBP/USD pair dropped from 1.3443 to 1.3363. It fell from the +2σ to the -2σ levels of the hourly Bollinger Bands.On the 4-hour chart, the price has broken below the 200-period SMA, which had been acting as support, with a real-body candle, and the daily chart is showing a similar price movement to the 4-hour chart. Although the pair rebounded during today’s Asian session, it has failed to sustain gains; therefore, traders should remain cautious of further declines during the U.S. trading session.

Today’s economic indicators include the New Zealand Dollar Manufacturing PMI at 6:30, the German Consumer Price Index at 16:00, Canadian Housing Starts at 22:15, Canadian International Securities Turnover at 22:30, U.S. Industrial Production and U.S. Capacity Utilization at 23:15,at 24:00, the U.S. NAHB Housing Market Index; at 24:50, remarks by U.S. Federal Reserve Bank of Boston President Collins; at 25:00, remarks by U.S. Federal Reserve Vice Chair Bowman; and at 29:30, remarks by U.S. Federal Reserve Vice Chair Jefferson.Keep an eye on the downside potential for GBP/USD, which has hit a year-to-date low.