GBP/USD, Oil Forecast: Two trades to watch

GBP/USD steady below 1.27 despite Trump’s tariff threats

• Trade tariff worries drive USD safe-haven flows
• BoE’s Huw Pill speaks
• GBP/USD failed to retake 1.27

GBP/USD rose to a 10-week high on Monday before slumping lower to its current level around 1.2630 amid a cautious market mood.

Trump has dampened risk appetite, Supporting the US dollar on renewed trade tariff wallet worries. Trump warned that trade tariffs on Mexico and Canada would proceed as planned despite the countries' efforts to increase border security. The announcement is driving safe-haven demand into the US dollar.

The dollar is rising but still trades down 3% from its January peak following a raft of weaker-than-expected U.S. economic data, which has fueled concerns over the economic outlook. Today, attention will be on U.S. consumer confidence, which is expected to fall to 103 in February. The data comes after Michigan's confidence slumped to a 15-month low at the end of last week, and PMI data pointed to deteriorating confidence in business.

In recent sessions, upbeat data has supported the pound, including stronger-than-forecast retail sales and services PMI data. The UK economic calendar is quiet. Instead, a speech by BoE chief economist Huw Pill could offer some guidance over the outlook for rate cuts. The BoE cut rates by 25 basis points in its February meeting and raised its inflation outlook. CPI rose to 3% YoY in January. This poses a headache for the central bank as it weighs up easing monetary policy further.

GBP/USD forecast – technical analysis

GBP/USD has rebounded over 4% from its 1.21 January low, but bulls appear to be running out of steam. Buyers need to rise above the 1.2650-90 zone, the 100 SMA, and the 2025 high to create a higher high and extend the bullish run.

Sellers would need to take out the 1.25 round number and the 50 SMA at 1.2470 to take a leg lower.

Oil rises US imposes more sanctions on Iran

• US applies new sanctions on Iran’s oil trade
• API oil inventory data is due later
• Oil trades in a tight range

Oil prices are rising for a second day on Tuesday amid fresh U.S. sanctions on Iran which increased concerns over tighter supply.

The US applied new sanctions on more than 30 brokers, tanker operators, and shipping companies for their role in transporting Iranian oil. This marks the second round of sanctions as President Trump aims to bring Iran’s crude exports to 0. Iran is the third largest producer in OPEC, with an output of 3.2 million barrels per day in January.

Meanwhile, traders are also eyeing a potential peace deal regarding Ukraine, which could result in eased sanctions on Russia, potentially boosting its oil exports. Increased supply to the market could pressure prices

Oil demand from the West remains solid. However, any further signs of the US economy slowing could unnerve the oil market. API US oil inventory data will be released later today.

Oil forecast – technical analysis

After falling back below the 200 SMA, oil is consolidating between 70 – 73. The price trades below its 50, 100 and 200 SMAs. The RSI is below 50 supporting further losses.

Bears have probed a break below its current range and will need a meaningful break below 70 – 69.90 to confirm a bearish continuation towards 68.40. Below here 67 comes into play.

On  the upside, buyers would need to rise above the 50 SMA and horizontal resistance at 73.00 to break out to the upside and expose the 200 SMA at 74.00 ahead of horizontal resistance at 75.00.