Watch for further downside potential in GBP/USD, which has hit a year-to-date low

Watch for further downside potential in GBP/USD, which has hit a year-to-date low

16.01.2026

In the previous day's U.S. currency trading, the dollar traded in a narrow range against the yen.The USD/JPY pair traded between 158.177 and 158.871. Price action remained confined to the area around the 20-period moving average (MA) on the hourly chart. On the 4-hour chart, the pair is searching for direction just below the 20-period MA, while on the daily chart, the +2σ Bollinger Band is acting as a 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. On the hourly chart, it fell from the +2σ to the -2σ Bollinger Band.On the 4-hour chart, the price has broken below the 200-day SMA, which had been acting as support, with the body of the candle closing below it. The daily chart is showing a similar price movement to the 4-hour chart. Although the pair rebounded during today’s Asian session, the upside has been limited; therefore, we should remain cautious of further declines during the U.S. session.

Today’s economic indicators include the New Zealand 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 Capacity Utilization at 23:15, the U.S. NAHB Housing Market Index at 24:00, and Collins at 24:50:Remarks by Boston Fed President Collins, at 1:00 AM: Remarks by Fed Vice Chair Bowman, and at 5:30 AM: Remarks by Fed Vice Chair Jefferson. Keep an eye on the downside potential for GBP/USD, which has hit a year-to-date low.

Past Market Reports

1. 17.04.2026New

   Will the market wait and see how much further the U.S. dollar can rise against the yen?

2. 16.04.2026New

   Will the weakening Swiss franc recover? Attention is turning to price movements during European trading hours.

3. 15.04.2026New

   Market participants are likely keeping a close eye on the upside potential of the euro, which has risen against the U.S. dollar

4. 14.04.2026New

   Should we keep an eye on remarks by key figures in the U.S. and try to gauge the direction of currency strength?

5. 13.04.2026New

   Market participants are likely watching for signs of a rebound in the Canadian dollar, which fell against the U.S. dollar following the release of employment figures

6. 10.04.2026

   Will the weakening Swiss franc continue to strengthen against the yen, or should we wait and see?

7. 09.04.2026

   Will the U.S. dollar, which has fallen against the yen, continue its downward slide, or should we wait and see how the market moves?

8. 08.04.2026

   Should we keep an eye on the upside for European currencies that have risen against the U.S. dollar?

9. 07.04.2026

   Market participants may be wary of further downside potential for the U.S. dollar, which has weakened amid concerns over the situation in Iran

10. 06.04.2026

    Investors should be wary of sudden spikes in volatility while major markets are closed