The pound is holding steady, but risks are increasing

The GBPUSD pair rose to 1.3567 and then paused. The main intrigue lies in the local UK elections. Find out more in our analysis for 6 May 2026.

GBPUSD forecast: key takeaways

• The GBPUSD pair appears strong, but UK domestic politics poses risks
• The market does not rule out two Bank of England interest rate hikes by the end of the year
• GBPUSD forecast for 6 May 2026: 1.3520 or 1.3600

Fundamental analysis

The GBPUSD rate rose to 1.3567 on Wednesday. Market sentiment is positive, but caution remains amid two factors: political uncertainty in the UK and tensions around the Strait of Hormuz.

The ceasefire in the Middle East remains fragile. At the start of the week, the US and Iran exchanged strikes, raising doubts about its sustainability. Meanwhile, the pound has outperformed many G10 currencies since the conflict began, largely due to a sharp shift in expectations regarding Bank of England policy.

While the market had previously priced in rate cuts, it now expects at least two rate hikes this year, with the possibility of a third. This supported the pound sterling earlier. However, such a path is increasing pressure on the economy, which is already showing signs of slowing.

An additional risk factor lies in the UK local elections on 7 May. Keir Starmer’s party is expected to suffer substantial losses, increasing the likelihood of political turbulence. Greater pressure on the Prime Minister and possible cabinet changes may weigh negatively on the pound.

The GBPUSD forecast is moderate.

Technical outlook

The GBPUSD H4 chart shows that after a confident rise from the area below 1.3400, the pair moved into the 1.3500–1.3650 range, where the movement gradually slowed. An attempt to consolidate above 1.3600 resulted in a local high near 1.3650, but the market failed to develop further upward momentum and retreated.

The price then entered a sideways phase with broad fluctuations within the range. The 1.3510–1.3520 zone is acting as firm support, from which the price has rebounded several times, while the 1.3600–1.3650 area remains the key resistance. The pair is now trading closer to the middle of the range, indicating a balance between buyers and sellers.

Bollinger Bands are showing contraction after the previous expansion, signalling lower volatility and accumulation ahead of the next move. Indicators also confirm neutral dynamics: MACD is located near the zero line, while the Stochastic Oscillator is turning upwards, signalling an attempt at short-term growth. Overall, the market remains in a consolidation phase, awaiting an external driver to break out of the range.

GBPUSD overview

• Asset: GBPUSD
• Timeframe: H4 (Intraday)
• Trend: sideways (consolidation after growth)
• Key resistance levels: 1.3600 and 1.3650
• Key support levels: 1.3520 and 1.3450

GBPUSD trading scenarios for today

Main scenario (Buy Stop)

Consolidation above 1.3600 would confirm an attempt to break out of the range upwards amid sustained risk demand and continued expectations for tighter Bank of England policy. In this case, the pair could move towards 1.3650.

• Take Profit: 1.3650
• Stop Loss: 1.3550

Alternative scenario (Sell Stop)

A breakout below 1.3520 would increase pressure on the pound amid geopolitical risks and domestic political uncertainty in the UK. The move could continue towards 1.3450.

• Take Profit: 1.3450
• Stop Loss: 1.3570

Risk factors

Risks to growth include heightened tensions in the Middle East and renewed demand for the dollar as a safe-haven asset. Local elections in the UK and potential political turbulence could add to pressure, limiting the GBPUSD's potential for strengthening.

Summary

The GBPUSD pair looks fairly solid, but risks for the pound remain. The GBPUSD forecast for today, 6 May 2026, suggests continued consolidation within the 1.3520-1.3600 range.

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