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 consistently hovering 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 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 trading 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 the body of the candle breaking through this level; 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, so traders should be on guard for 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.