Aggressive US tariff policy triggered a panic sell-off in American stock markets, with major indexes posting significant losses. Investors rushed into alternative assets, putting pressure on the dollar.
In addition, Fed Chair Jerome Powell pointed out that Donald Trump's tariffs turned out to be higher than expected. They could lead to increased inflation and slower economic growth, which, in turn, may weaken the dollar.
The GBPUSD trend has been on a steady upward trajectory since late January 2025. By March 5, it stabilized at around 1.28800, with the pair trading in a 1.28800–1.30000 channel, with a 1,200-pip range. Then, on April 2, Donald Trump announced new US tariffs, triggering a sharp decline in the US dollar. This sent GBPUSD soaring 2,800 pips in just two days, peaking at 1.32059. After that, the pair retraced slightly more than 1,000 pips, settling around 1.30974.
On Friday, April 4, the US Non-Farm Payrolls report sent the quotes down another 2,223 pips to the support level of 1.28800. On Monday, April 7, the market opened with a gap down of over 400 pips below Friday’s closing price. The daily candle tried to fill the gap but failed, eventually dropping even below the 200-day simple moving average, which had been acting as a key support level.
On Tuesday, April 8, the Asian session tried to raise quotes by almost 800 pips, but with the European session underway—and especially ahead of the US session—there’s a high likelihood of further decline toward the 1.27000 level, a key psychological support zone for the US dollar. The daily Relative Strength Index (RSI) sits at 34, nearing oversold territory (20), signaling a clear lack of buying interest in the asset.
Trading strategy suggestion: sell at the current price. Take profit — 1.27000. Stop loss — 1.28300.
This content is for informational purposes only and is not intended to be investing advice.
